Trading methods · Question 11 of 12
The following orders are in an auction. Buy: 200 shares at market, 300 shares limit 10.10 euros, 500 shares limit 10.00 euros. Sell: 100 shares at market, 300 shares limit 9.90 euros, 500 shares limit 10.00 euros. What auction price results?
1 answer is correct. Hard
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Answer
- B 10.00 euros
Explanation
At 9.90 euros, 1,000 shares would be demanded but only 400 offered, giving a turnover of 400 shares. At 10.00 euros, demand of 1,000 shares meets supply of 900 shares, giving 900 shares. At 10.10 euros it would be only 500 shares, so under the principle of maximum executable volume the price of 10.00 euros wins.