Which of the following statements about screen-based trading is correct?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Orders that are not matched remain on the screen and are open for future matching during the day.
Option (1) Orders that are not matched remain on the screen and are open for future matching during the day. — True. An order that finds no match is not lost. It remains on the screen and can be matched later during the day.
Option (2) Orders that are not matched are carried forward to the next settlement period. — False. Unmatched orders stay open for matching during the same day.
Option (3) The prices of shares going up and down are shown to the parties at the close of business hours. — False. Both parties see prices going up and down at all times during business hours.
Option (4) The computer in the broker’s office matches the orders at the price fixed by the broker. — False. The computer matches orders at the best bid and offer price.
NCERT (Pre-rationalised Edition): “TRADING AND SETTLEMENT PROCEDURE … Every broker has to have access to a computer terminal that is connected to the main stock exchange. In this screen-based trading, a member logs on to the site and any information about the shares (company, member, etc.) he wishes to buy or sell and the price is fed into the computer. The software is so designed that the transaction will be executed when a matching order is found from a counter party. The whole transaction is carried on the computer screen with both the parties being able to see the prices of all shares going up and down at all times during the time that business is transacted and during business hours of the stock exchange. The computer in the brokers office is constantly matching the orders at the best bid and offer price. Those that are not matched remain on the screen and are open for future matching during the day. …” |