Question

Suppose the displayed ask is $20.05 for 100 shares and the displayed bid is $20 for 150 shares. What happens if another dealer places a limit order to buy 50 shares for $20.02?

Answer 1

Answer:

There will be no transaction

Step-by-step explanation:

Given:

Displayed ask price = $20.05 for 100 shares

Displayed bid price = $20 for 150 shares

Explain:

If a limit order to buy = 50 shares for $20.02

Computation:

Displayed bid will be not accepted because, displayed bid price is for 150 shares not 100 shares

Limited order will be also not accepted.

So, there will be no transaction.