SIE - Securities Industry Essentials Exam
A customer is very bearish on ABC stock. It is currently trading at $51 per share. She only wants to enter a 100 share short position if support gives out at the $50 level. Which type of order might she use?
Buy 100 ABC limit 50.02A
Sell 100 ABC stop 49.90B
Sell 100 ABC limit 49.90C
Sell 100 ABC stop limit 50.40D
She wants to enter the position on weakness if support doesn't hold at $50. So, she can use a stop order to sell 100 shares at $49.90. If ABC stock trades down to $49.90, she will be short 100 shares near $49.90 (could be lower or higher).