SIE - Securities Industry Essentials Exam

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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 50.02
A
Sell 100 ABC stop 49.90
B
Sell 100 ABC limit 49.90
C
Sell 100 ABC stop limit 50.40
D

Explanations

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).

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