The primary risk in using a GTC limit sell order rather than a market order is that
A) the market price may exceed the limit price when the order is placed.
B) the limit order may not be executed.
C) the limit order may be executed at a price above the market price.
D) the limit order expires at the end of the day and may not be executed.

Question

Quizplus · Accepted Answer

The primary risk of using a Good-Til-Cancelled (GTC) limit sell order instead of a market order is that the limit order may not be executed if the market price never meets or exceeds the specified limit price. Unlike a market order, which is executed immediately at the current market price, a limit order only executes at the limit price or better, leading to the possibility that it might not be executed at all if the market does not reach the specified price.

The Primary Risk in Using a GTC Limit Sell Order