Question

You purchased XYZ stock at $50 per share. The stock is currently selling at $80. You expect the stock price to go up, but not 100% sure. Placing a ___________ may protect your current gains of $30 while at the same time keeping the opportunity open for future upward potential.

Answer 1

"Stop-loss order" is the right answer.

Step-by-step explanation:

According to the question,

Purchase price,

= $50

Current selling price,

= $80

Current gains,

= $30

• Investors begin to give their earnings if somehow the market capitalization begins to fall beneath $80. In advance to minimize this, we need to set a purchase requisition of $80 for stop-loss.
• So whenever the market decreases beyond $80, with us investments are traded, and thereby the existing profits of $30 have been safeguarded.

Thus, the above is the correct explanation.