Question 21.12.2. For a consumption commodity of a certain grade, the December futures price is $31.50. Adam, Betty, Charles, and Denise are interns who work at a commodity futures trading firm. They have the following preferences:

• Adam does not have a position but would like to take a short position as quickly as possible (and he is not concerned with the exact price)
• Betty does not have a position but would like to buy (aka, take a long position) but conditional on a favorable price (she is okay if the order does not execute)
• Charles already has an in-the-money short position with a delivery price of $40.00; if his position's value were to rapidly decrease, he would like to trigger an exit (i.e., close-out the position) at whatever is the then-prevailing market price
• Denise already has an in-the-money short position with a delivery price of $38.00; if her position's value were to rapidly decrease, she would like to trigger an exit (i.e., close-out the position) but conditional on a price that she designates (or more favorable)

Based on these preferences, their mutual friend Eddie makes the following recommendations:

• Adam should place a market order
• Betty should place a limit order
• Charles should place a stop-loss order to buy at some price above $40.00
• Denise should place a stop-loss order to buy at some price below $40.00

Three of Eddie’s recommendations are good and appropriate, but one of his recommendations is a mistake. Which of the following statements is TRUE, i.e., which recommendation is the mistake?