Price discovery is a dynamic process that involves customer orders being translated into trades and transaction prices; however because price discovery is not instantaneous, individual participants have an incentive to "market-time" the placement of their orders.

Question

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Price discovery is not instantaneous and there can be a lag time between when an order is placed and when it is executed. This can create an incentive for individual participants to try to time the market by placing orders at a particular time to try to get the best possible price.

Price Discovery Is a Dynamic Process That Involves Customer Orders