Since limit orders and quotes provide trading options to the market as a whole, what effect would an increase in volatility have on bid/ask spreads? Should limit order traders place their orders close to or far from the market when they cannot adjust their limit prices quickly?
Since limit orders and quotes provide trading options to the market as a whole, what effect would an increase in volatility have on bid/ask spreads? Should limit order traders place their orders close to or far from the market when they cannot adjust their limit prices quickly?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Since limit orders and quotes provide trading options to the
market as a whole, what effect would an increase in volatility have
on bid/ask spreads?
Should limit order traders place their orders close to or far from
the market when they cannot adjust their limit prices quickly?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3815ac37-db16-4647-a9bb-97597410c9a0%2F5918248d-d396-451c-9792-8442bfd94567%2Fo8uqqv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Since limit orders and quotes provide trading options to the
market as a whole, what effect would an increase in volatility have
on bid/ask spreads?
Should limit order traders place their orders close to or far from
the market when they cannot adjust their limit prices quickly?
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