NISM Certifications · NISM-Series-VIII: Equity Derivatives · Trading Mechanism
Which statement about the order types and conditions in the exchange's derivatives trading system is correct?
A market order is executed at the best price available on the opposite side of the order book. It prioritises execution over price, whereas limit orders prioritise price, and immediate-or-cancel orders are cancelled if not matched at once.
- AAn IOC order remains in the book until the end of the day if not matched
- BA market order is executed at the best available price on the opposite sideCorrect
- CA limit order guarantees execution at any price
- DA stop loss order is triggered only when the market price falls below the limit price
Explanation
A market order is executed immediately at the best available opposite-side price, so execution is certain but price is not. An IOC order is cancelled if not matched immediately, not kept all day. A limit order guarantees price, not execution.
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