Gavin has owned MNOP stock for several years and has seen the stock increase in value from $20 to $35. He wants to "lock in" his gains, so he needs to place an order that will sell his stock at the next available opportunity after its market price drops to $33. What kind of order should he use?

Question

Quizplus · Accepted Answer

A stop-loss order is designed to limit an investor's loss on a security position. By placing a stop-loss order at $33, Gavin ensures that his stock will be sold at the next available price after it drops to $33, effectively "locking in" his gains by preventing further loss if the stock price continues to decline.

Gavin Has Owned MNOP Stock for Several Years and Has