Trading & MarketsQuestion 83 of 125
A sell stop order becomes a market order to sell when the stock:
a.Rises to or through the stop price
b.Trades at or through the stop price on the downside
c.Reaches its 52-week high
d.Pays a dividend
Explanation
A sell stop is placed below the current market and is triggered when the stock trades at or through the stop price, at which point it becomes a market order to sell. Investors often use sell stops to limit losses or protect gains on a long position.
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