An instruction to a securities agent to sell a stock when it reaches a specific price is a ________.

Question

Quizplus · Accepted Answer

A stop loss order is an instruction to a securities agent to sell a stock when it reaches a specific price, which is commonly used to limit potential losses. This type of order can help investors avoid significant losses if the stock price drops unexpectedly. Short selling involves borrowing shares and selling them with the hope of buying them back at a lower price, while a market order simply instructs the securities agent to buy or sell a security at the best available price. A limit order is an instruction to buy or sell a security at a specific price or better. Therefore, the best choice in this scenario is D.

An Instruction to a Securities Agent to Sell a Stock