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Answer: Stop-loss sell order at $30
## Explanation A **stop-loss sell order at $30** is the correct choice because: - **Goal 1: Retain ownership as long as the stock continues to go up** - A stop-loss order only triggers when the stock price falls to the stop price ($30), so it doesn't interfere with potential upside gains. - **Goal 2: Exit the position completely if the stock drops below $30** - When the stock price hits $30, the stop-loss order becomes a market order and executes at the next available price, ensuring the position is closed out. **Why other options are incorrect:** - **A. Sell market order**: Would execute immediately at current price, not allowing for upside potential - **B. Sell limit order at $37**: Would only execute if price reaches $37 or higher, but provides no protection if price falls below $30 - **D. Stop-and-limit sell order at $30**: While similar to stop-loss, it becomes a limit order rather than market order, so execution is not guaranteed if price gaps below $30 The stop-loss order perfectly balances both objectives by allowing unlimited upside while providing downside protection.
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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