Student Notes 20160308 Ch8-10.pdf - Market Order When you...

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Market Order When you as in investor, make an order to buy some security and want your order executed quickly the price you pay is the best available price Bid is an offer to buy a security - Ask is an offer to sell a security Limit order Order executes only a pre-specified price, and maybe not immediately Electronic Limit Order Book There is no longer a physical book, but there is a spreadsheet that keeps track of the limit orders Updated in milliseconds High frequency trading Sophisticated process of submitting trades Algorithmic trading Measures of liquidity Spread main measure Difference between bid and ask prices Depth main measure Number of shares available at a given price Volume another measure Number of shares traded Information given on stock quotes
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