خرید و دانلود نسخه کامل کتاب CFA 2019 Schweser – Level 3 SchweserNotes Book 5: TRADING AND PERFORMANCE EVALUATION – Original PDF

Market microstructure refers to the structure and processes of a market that may affect the pricing of securities in relation to intrinsic value and the ability of managers to execute trades. The microstructure of the market and the objectives of the manager should affect the type of order the manager uses. The two major types of orders are market orders and limit orders. The first offers greater certainty of execution and the second offers greater certainty of price. A market order is an order to execute the trade immediately at the best possible price. If the order cannot be completely filled in one trade, it is filled by other trades at the next best possible prices. The emphasis in a market order is the speed of execution. The disadvantage of a market order is that the price it will be executed at is not known ahead of time, so it has price uncertainty. A limit order is an order to trade at the limit price or better. For sell orders, the execution price must be higher than or equal to the limit price. For buy orders, the execution price must be lower than or equal to the limit price. The order could be good for a specified period of time and then expire or could be good until it is canceled. However, if market prices do not move to within the limit, the trade will not be completed, so it has execution uncertainty.