Answer-first summary for fast verification
Answer: Stop-loss sell order at $30
## Explanation A **stop-loss sell order at $30** best meets the dual objectives because: 1. **Retains ownership during price increases**: The stop-loss order only triggers when the stock price drops to $30, allowing the investor to continue holding the stock as long as it's going up 2. **Exits position on price decline**: Once the stock drops to $30, the stop-loss order becomes a market order and executes at the best available price, completely exiting the position **Why other options don't work**: - **A. Sell market order**: Would execute immediately at current price, not allowing for potential upside - **B. Sell limit order at $37**: Would only execute if price reaches $37 or higher, but provides no protection if price drops below $30 - **D. Stop-and-limit sell order at $30**: May not execute if market gaps below $30, potentially leaving the position exposed to further losses The stop-loss order provides the automatic exit protection while allowing unlimited upside potential.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
Assume you have a long position in a stock with a current market price of $35. You have two goals. First, to retain ownership as long as the stock continues to go up. Second, to exit the position completely if the stock drops below $30. Which order best meets your dual objectives?
A
Sell market order
B
Sell limit order at $37
C
Stop-loss sell order at $30
D
Stop-and-limit sell order at $30
No comments yet.