SRM opened the trading day at $245.00. Bahk believes that SRM stock is undervalued and will soon increase. At 10:00 a.m., Bahk instructs Morales to place a buy order for 50,000 shares, good for one day, when SRM’s stock price is $245.10. The trading desk reviews the stock’s volatility, market conditions, and spread, and determines that Pinnacle Brokerage Services (PBS) is the best broker to execute the trade. At 11:00 a.m., Morales releases the order when SRM’s stock price is $246.50. During the day, PBS executes 46,000 shares at an average price of $249.75 per share for an overall fee of $46. At the end of the day, shares of SRM close at $253.00 and the buy order for the remaining 4,000 shares is canceled.
The cost of delaying the submission of the SRM order is closest to:
A. $64,400.
B. $69,000.
C. $149,500.
