Mid-point orders are executed at what price and with what level of pre-trade transparency?

Mid-point orders are executed at what price and with what level of pre-trade transparency?

• A. Mid-point price with full pre-trade transparency
• B. Mid-point price without pre-trade transparency
• C. Best bid price with transparency
• D. User-defined price

Answer: (B)

Mid-point orders aim to trade at the price halfway between the current best bid and the current best offer, providing a price that’s between the two sides rather than at one edge of the spread. At the same time, these orders are typically not visible to the market before execution, meaning there is no pre-trade transparency. This helps protect liquidity providers from premature signaling while still seeking a fairer execution price. For example, if the best bid is 100 and the best offer is 102, the mid-point price is 101, and the order would be executed at 101 when matched, depending on venue rules and price increments. The other options don’t fit because they either imply trading at the current bid with visible pre-trade information, or require a price input that isn’t how mid-point orders operate.

Mid-point orders aim to trade at the price halfway between the current best bid and the current best offer, providing a price that’s between the two sides rather than at one edge of the spread. At the same time, these orders are typically not visible to the market before execution, meaning there is no pre-trade transparency. This helps protect liquidity providers from premature signaling while still seeking a fairer execution price.

For example, if the best bid is 100 and the best offer is 102, the mid-point price is 101, and the order would be executed at 101 when matched, depending on venue rules and price increments.

The other options don’t fit because they either imply trading at the current bid with visible pre-trade information, or require a price input that isn’t how mid-point orders operate.