128k views
4 votes
Suppose the displayed ask is $20.05 for 100 shares and the displayed bid is $20 for 150 shares. What happens if another dealer places a limit order to buy 50 shares for $20.02?

User Armi
by
6.1k points

1 Answer

3 votes

Answer:

There will be no transaction

Explanation:

Given:

Displayed ask price = $20.05 for 100 shares

Displayed bid price = $20 for 150 shares

Explain:

If a limit order to buy = 50 shares for $20.02

Computation:

Displayed bid will be not accepted because, displayed bid price is for 150 shares not 100 shares

Limited order will be also not accepted.

So, there will be no transaction.

User Mory
by
7.4k points