Question

You purchased XYZ stock at $50 per share. The stock is currently selling at $65. Your gains could be protected by placing a

Answer 1

To protect gains on a stock that has risen in value, a stop-loss order can be placed with a broker, which automatically sells the stock if it falls to a predetermined price, thus securing a part of the profit.

Step-by-step explanation:

If you purchased XYZ stock at $50 per share and the stock is currently selling at $65 per share, your gains could be protected by placing a stop-loss order. A stop-loss order is an order placed with a broker to buy or sell once the stock reaches a certain price.

It is designed to limit an investor's loss on a security position. Setting a stop-loss order at, for example, $60, would protect your gain since the stock would be sold if it falls to this price, thus locking in a portion of the profit from your initial investment.

Answer 2

Answer: stop loss order

Step-by-step explanation:

A stop-loss order is a form of order that occurs when an investor tells the broker to either purchase or sell a stock when the stock has reached a particular price. The function of this is to help curb losses on the stock.

In this situation, the stock is being traded at a oricegifher than the purchase price so a stop loss order was vital.