You bought a stock at $50 a share,and it has increased in price to $70 a share.You think its price will increase even more but you are also concerned that it might go back to $50,eliminating the entire gain.Given this information,you should place which kind of order?
A)Stop-loss
B)Profit-retention
C)Limit
D)Deferred sales

Question

Quizplus · Accepted Answer

A stop-loss order is designed to limit an investor's loss on a security position. By placing a stop-loss order at $50, you ensure that the stock is sold before it falls back to your original purchase price, thus protecting your gains.

You Bought a Stock at $50 a Share,and It Has