Question

Which of the following describes a position trade? A. Buying a security into inventory directly from a customer with a mark-down B. After receiving a buy order from a customer, the dealer then purchases the stock into inventory and resels t to the customer C. Simultaneously buying and selling short the same or equivalent security D. Selling stock at the direction of a customer and using the proceeds to buy another stock for that customer

Answer 1

Answer:

B. After receiving a buy order from a customer, the dealer then purchases the stock into inventory and resels to the customer

Explanation:

Position trade has to do with anticipating an increase in market price by purchasing some stocks for keeps such that one sells when prices are higher.

In another sense, it is purchasing stocks when one is certain of selling them such purchasing based on existing client's demand for the stock as contained in option B.