Buy orders are awesome since they give investors more control when buying in 🤝
But what about the other end of the deal?
The most important definition for this lesson is. . .
Sell Order = Selling a stock at or above a specified “limit” price 💰
If the stock is trading at or above the limit price, the order will execute immediately 💻
If the stock is trading below the limit price, the order will not execute until the stock reaches the limit price or higher 👆
Stop Limit orders can be canceled at any time, but they cannot be changed once they are placed 📵
Sell limit orders can be used to limit potential losses in a falling market 📉
So, let’s say you’re worried about company ABCD going down 😥
They’ve been having a rough time, but you aren’t ready to let go 💔
But, limit orders are a great way to set a boundary 🛑
You could create a stop limit order that sells the stock if company ABDE drops by $50, for example
The same is true vice versa 🤔
If you’ve been making a lot of money on company ABCD’s stock and want to take home some profit, you can create a sell limit order to sell at your desired price 🚀
Please note that while sell orders give you more price control, the order isn’t guaranteed ✍️
And if it does go through, your buying power will be deducted, so never invest more than you can afford to lose 🚀
Now that you know more about stop limit orders, you have more ways to protect your downside and collect profits 🥳
As always, do your research and happy investing 🌹
