SIE practice questioneasyOrder Types
A customer wants to sell shares of ABC only if the price falls to $45 or lower. Which type of order should they place?
- AMarket order
- BStop order
- CSell limit order
- DSell stop order✓ Correct answer
Explanation
Why D — Sell stop order
A sell stop order is placed below the current market price and triggers a sell market order if that price is reached, providing downside protection. A market order sells immediately, a stop order without specifying sell/buy is unclear, and a sell limit order only executes at the limit price or better, not below.
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