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TDF Dealer's liability desk purchases 5,000 shares of a stock with a market order at $15 bid, $15.20 ask. The desk later sells the shares with a market order at $15.25 bid, $15.40 ask. What is TDP Dealer's gain on the trades?
Suggested Answer: C
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The gain is calculated as:
Buying Price: 5,000 shares purchased at $15.20 = $76,000.
Selling Price: 5,000 shares sold at $15.25 = $76,250.
Profit Calculation: $76,250 - $76,000 = $1,000.
This reflects the gain from executing the market orders at the respective bid-ask prices.
12 comments · newest first
MI
Mitzie
10 days ago
I’m leaning towards $1,000. The calculations seem off.
RO
Rosamond
15 days ago
I agree, $1,250 makes sense.
MO
Monte
20 days ago
I think the gain is $1,250.
DE
Demetra
25 days ago
I thought it would be more than that!
SH
Shawnna
1 month ago
Definitely $1,250 gain!
LU
Luisa
1 month ago
Wait, are we sure about the numbers?
MA
Malcom
1 month ago
That's a gain of $0.20 per share!
TA
Tammi
2 months ago
They bought at $15.20 and sold at $15.40.
BR
Brice
2 months ago
I’m leaning towards $1,000, but I could be mixing up the numbers. I should have practiced more on these types of questions.
WI
Willodean
2 months ago
I feel like the answer might be $1,250, but I’m not confident. I need to double-check the calculations for the total shares.
DO
Dorothy
2 months ago
I remember a similar question where we had to calculate gains from market orders. I think we need to look at the ask price when buying and the bid price when selling.
GA
Gabriele
2 months ago
I think the gain is based on the difference between the buy and sell prices, but I'm not entirely sure how to calculate it for 5,000 shares.