Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 3, Problem 1PS
Summary Introduction

To determine: The differences among a stop-loss order, a limit sell order and a market order.

Introduction: The stop-loss order, a limit sell order, and a market order are utilized by investors for different purposes.

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Explanation of Solution

Stop-loss Order-It is basically used to pursue a broker to buy or sell stock after it reaches a certain price. Stop-loss Order is used by the investors to limit their loss on a certain stock position.

Limit-sell Order-It is basically used to pursue a broker to sell stock at a certain price. It is used by investors to sell stock at a better price.

Market-Order-It is defined as an unrestricted order as there are no restrictions in the buy or sell which will be included in the order. In a market order, the broker is asked to buy or sell stock at the price available in the market.

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Students have asked these similar questions
What are the differences among a stop-loss order, a limit sell order, and a market order?
Differentiate among market orders, limit orders, and stop-loss orders. What is the rationale for using a stop-loss order rather than a limit order?
Examples of a market order, limit order and a stop loss?
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