What is the opening price if limit orders on one side of the order book are executed?

What is the opening price if limit orders on one side of the order book are executed?

• A. Arithmetic mean of two last orders
• B. Price of last-executed limit order
• C. Reference price
• D. Opening price determined by volume

Answer: (B)

The opening price reflects the price of the last executed limit order. When limit orders on one side of the book are filled at the opening, the most recent execution sets the opening price because it represents the last observed trade price as trading begins. The other options don’t match this mechanism: averaging two orders isn’t how opening prices are derived, a reference price is a separate benchmark used under different circumstances, and a volume-based rule isn’t used here since the opening price is determined by the price of the last trade that occurred.

The opening price reflects the price of the last executed limit order. When limit orders on one side of the book are filled at the opening, the most recent execution sets the opening price because it represents the last observed trade price as trading begins. The other options don’t match this mechanism: averaging two orders isn’t how opening prices are derived, a reference price is a separate benchmark used under different circumstances, and a volume-based rule isn’t used here since the opening price is determined by the price of the last trade that occurred.