In the central limit order book for XYZ share, the price at the top of BUY is $49.520 (quantity 4025) while the price at the top of SELL is $49.600 (quantity 1562). There are no other orders in the queue.A trader puts a SELL limit order for 2000 XYZ shares at $49.550.Give the price that will appear in the central limit order book at the top of the SELL column.
Question
In the central limit order book for XYZ share, the price at the top of BUY is 49.600 (quantity 1562). There are no other orders in the queue.A trader puts a SELL limit order for 2000 XYZ shares at $49.550.Give the price that will appear in the central limit order book at the top of the SELL column.
Solution
The price that will appear at the top of the SELL column in the central limit order book will be 49.550, which is lower than the current top SELL price of $49.600. In a limit order book, orders are prioritized first by price (with buy orders at higher prices and sell orders at lower prices getting priority), then by time (with earlier orders getting priority). Therefore, the trader's order will move to the top of the SELL column.
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