Suppose the following order arrive in sequence:

1. Harry: Buy 700 stocks at market.

2. Jenny: Sell 1600 stocks at limit $50.04.

What is the bid ask spread after these orders arrive and are executed?

Consider the as below limit order book.

                                                     

Buyers					Sellers
Price	Time	Quantity	Trader		Price	Time	Quantity	Trader
50.05	9.30	1,000	David		50.09	9.30	200	Gina*
50.04	9.32	500	Ellen		50.09	9.31	400	Amy
50.03	9.31	400	Fred		50.11	9.32	500	Bill
50.02	10.01	500	Brian		50.12	9.30	1,000	Cathy

Answer rating: 100% (QA)

o calculate the bidask spread after these orders arrive and are executed lets first analyze the orde... View the full answer