Following LEI Lesson 7, use slides 17 and 24 from Building Wealth Lesson 6 to explain bid and ask prices and how buyers and sellers interact in a market. Introduce the bid-ask spread as the difference between the ask and bid prices. Then use the Market Order, Limit Order, and Stop Order sections of the SEC’s Understanding Order Types bulletin to compare how orders are executed. Emphasize the trade-off between execution and price certainty, including the possibility of partial execution or an unfilled order.
Placing a Trade
Supplemental Instruction for Essential Lesson 1
15 MIN(S)
Resources
Federal Reserve Bank of Dallas, Building Wealth Lesson 6: Save and Invest—Bonds, Stocks and Mutual Funds, slides 17 and 24
SEC, Understanding Order Types – Investor Bulletin, sections on market, limit, and stop orders.