Chapter 04 · Section 4.1

Limit Orders- Timing

Let us take a closer look at this limit order:

Buy 3 Puts Citicp July 55 at 6 3/8 or better

At the moment the order reaches the trading floor, Citicorp July 55 put options trade at 6 1/2. Should the floor broker buy?

b) yes
No. The limit order may only be executed if the price is as good as or better than the specified limit. For a buyer, "good" is at the lowest price possible.