General Securities Representative (Series 7) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Series 7 Exam for General Securities Representatives. Study with comprehensive multiple-choice questions, each with detailed explanations to ensure you understand key concepts. Excel in your exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Placing an order to "Buy me 300 shares of EGG when it hits 30" is an example of what type of order?

Market Order
Buy Limit Order
Buy Stop Order
Sell Stop Order

The correct answer is: Buy Limit Order

The order "Buy me 300 shares of EGG when it hits 30" is categorized as a Buy Limit Order. This type of order is instructed to purchase shares only at or below a specified price, which in this case is $30. The rationale behind a Buy Limit Order is rooted in the trader's intention to control the entry price for the purchase. By placing the order at a specified limit (in this case, $30), the investor ensures that they will not pay more than this threshold. This approach is often employed when an investor believes that the stock will reach a certain price before it begins to rise again. This order will only execute if the market price of the stock reaches $30 or lower, thereby potentially allowing the investor to benefit from purchasing shares at an advantageous price relative to their market value. If the stock does not reach this price point, the order will remain unfilled. Understanding this distinction is crucial, as it highlights how different order types can be used strategically in various market conditions and how investors can optimize their entry points into different securities.