Which of the following are characteristics of stop-loss orders?
I. the risk of whipsawing
II. the ability to limit downside losses
III. the guaranteed execution within the order period
IV. the conversion to a market order
A) I and II only
B) III and IV only
C) I, II and IV only
D) II, III and IV only

Question

Quizplus · Accepted Answer

Stop-loss orders are characterized by the risk of whipsawing (I), the ability to limit downside losses (II), and the conversion to a market order once the stop price is reached (IV). They do not guarantee execution within the order period (III), as the market price may not reach the stop price within the desired timeframe.

Which of the Following Are Characteristics of Stop-Loss Orders