Topic_3_E2 - Topic 3 Exercise 2 Trading Securities Trade...

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Topic 3 Exercise 2 Trading Securities Trade Execution Brokerage firms have some flexibility about how your trade orders are executed. This is true whether the orders are executed online or by instructions given to an account executive. The price that you receive in a sale or pay for purchase could be affected by where the order is executed. In the hot IPO issue markets of 1998 and 1999, many investors were caught by surprise on prices paid for securities that were purchased or the price received in a sale. Many investors complained about execution of orders. The SEC has taken steps to provide information on how orders are executed and also is requiring additional exposure by brokerage firms. The options that firms have in directing orders are discussed in “Trade Execution: What Every Investor Should Know.” After reviewing the concepts covered in this article, address the following questions: 1. Describe the brokerage firm’s choices when executing an order. For a company listed on a national exchange, the broker can send the order to the floor of
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Topic_3_E2 - Topic 3 Exercise 2 Trading Securities Trade...

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