A customer enters a day order to sell 300 XYZ stock at 34.60. XYZ continues to trade in a 33 to 33.60 range. An hour before the close, he considers changing the order to a GTC order. You respond that he might consider allowing the order to remain on the books as a day order, and if it remains unexecuted at the close, to re-enter it the next day as a GTC order. You would have based this recommendation on concern for which of the following?
A) An existing order has precedence over a new order when it comes to execution.
B) Additional cost to the firm of changing the order twice in a day.
C) Weakening the customer's risk tolerance by encouraging him to change orders frequently.
D) Day orders are less risky than GTC orders.
Answer: A) An existing order has precedence over a new order when it comes to execution.