Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments

Mr. Sunil Verma places a limit buy order for 500 shares at Rs 200 on the exchange. The best available sell offers are 300 shares at Rs 199 and 400 shares at Rs 201. Under price-time priority matching in the order book, what happens?

300 shares trade at Rs 199 and the unfilled 200 shares remain in the order book as a buy at Rs 200. A limit buy cannot execute above its limit, so the Rs 201 offer is not matched, and the order is not rejected.

  1. A300 shares trade at Rs 199 and the remaining 200 stay in the book as a buy order at Rs 200Correct
  2. B500 shares trade at Rs 199
  3. C300 shares trade at Rs 199 and 200 shares trade at Rs 201
  4. DThe order is rejected because it cannot be fully filled

Explanation

A limit buy can execute only at its limit price or better (Rs 200 or lower). Rs 199 qualifies, giving 300 shares; Rs 201 is above the limit so it cannot trade. The unmatched 200 shares rest in the book at Rs 200 as a normal limit order.

Did you get it right without looking?

One question tells you little. A timed set on Securities Market Segments shows your real accuracy, how long you take and where you lose marks.

Practise Securities Market SegmentsFree diagnostic mock

More Securities Market Segments questions