SIE practice questioneasyOrder Types
Which order type would you use to protect an unrealized gain on a stock you own if the price drops below a certain point?
- ABuy limit order
- BBuy stop order
- CSell stop order✓ Correct answer
- DSell limit order
Explanation
Why C — Sell stop order
A sell stop order is designed to sell once the price falls to or below the stop price, protecting against further loss. Buy stop is used to buy above the market; the other orders are not suited for downside protection.
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