You sold ABC stock short at $80 per share.Your losses could be minimized by placing a __________:

Question

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A stop-buy order can be used to limit losses by automatically triggering a purchase of ABC stock to cover the short position if the stock rises above a predetermined price (stop price). This can limit losses because it ensures that the short position is covered before the stock price rises too high. Option A) limit-sell order, however, is not a good choice because it would result in further losses if the stock price continued to rise instead of falling back down. Option B) limit-buy order and D) day-order do not provide any protection against losses.

You Sold ABC Stock Short at $80 Per Share