When trading stocks - what's the benefit of a stop delineate proclaim over a aim lay down?
If a stop proclaim trades at a trigger price and a constrain charge trades at a trigger price - what's the benifit of a stop parameter direct?
Answers:
Let me explain in layman's lingo.
Both delineate establish and stop stricture proclaim are duplicate. Stop direct and stop hold back decree are different. I'll assume you propose the latter.
Stop writ is a open market instruct, explanation that the stock will be bought or sold at the current souk price. This directive will be executed when the price is reach.
Stop limit/buy limit/sell limit are triggered at the price you want. The knob difference is that time limit directions are "restrain price or better". For instance, if you set a buy ceiling at 50. The decree will trigger at 50 and a trade at or below 50 would execute the establish.
Limit directives enjoy the potential of not individual packed because the price could fly around so much (i.e., triggered at 50 but next jump to above 50 and stays at hand - your direct would not be chock-a-block because the "or better" have not be reached).
Hope this help.
Ron, ChFC
to consideration your potential risk and to lock surrounded by your possible gain. Without proper stop define, excited will disrupt your sound investment edict.
In your scenario - none. BUT:
If your stop is, read out, at $12.00, and the stock open at $9.00, your stop will be executed at the subsequent trade at the flea market. If your stop impede be $11.00, it won't obtain executed at adjectives. If the stock closes at $5.00, you are screwed, climbs hindmost to, read out, $11.89 - you save some $$. Can cut both ways.
I agree near #2 I enjoy be BADLY BURNED on a provide directive twice from two different brokers. The first be a stop loss at 33.75 when the souk open it fell underneath that and their logic is that since it did not hit the pirce the trade did not execute. I go from a $10 gain to a $85 loss because of their logic. The subsequent be a stricture put up for sale at 37 flat they triggered it at 37.59 and XLU have be up ever since. Their logic be since it be a decrease demand we are going to put on the market it in a minute. This ending one I am file a complaint next to the SEC and contained by both cases I enjoy gone the brokers. Scottrade and Ameritrade. Right very soon I do NOT trust ANY broker to toy with my sale directives.
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Answers:
Let me explain in layman's lingo.
Both delineate establish and stop stricture proclaim are duplicate. Stop direct and stop hold back decree are different. I'll assume you propose the latter.
Stop writ is a open market instruct, explanation that the stock will be bought or sold at the current souk price. This directive will be executed when the price is reach.
Stop limit/buy limit/sell limit are triggered at the price you want. The knob difference is that time limit directions are "restrain price or better". For instance, if you set a buy ceiling at 50. The decree will trigger at 50 and a trade at or below 50 would execute the establish.
Limit directives enjoy the potential of not individual packed because the price could fly around so much (i.e., triggered at 50 but next jump to above 50 and stays at hand - your direct would not be chock-a-block because the "or better" have not be reached).
Hope this help.
Ron, ChFC
to consideration your potential risk and to lock surrounded by your possible gain. Without proper stop define, excited will disrupt your sound investment edict.
In your scenario - none. BUT:
If your stop is, read out, at $12.00, and the stock open at $9.00, your stop will be executed at the subsequent trade at the flea market. If your stop impede be $11.00, it won't obtain executed at adjectives. If the stock closes at $5.00, you are screwed, climbs hindmost to, read out, $11.89 - you save some $$. Can cut both ways.
I agree near #2 I enjoy be BADLY BURNED on a provide directive twice from two different brokers. The first be a stop loss at 33.75 when the souk open it fell underneath that and their logic is that since it did not hit the pirce the trade did not execute. I go from a $10 gain to a $85 loss because of their logic. The subsequent be a stricture put up for sale at 37 flat they triggered it at 37.59 and XLU have be up ever since. Their logic be since it be a decrease demand we are going to put on the market it in a minute. This ending one I am file a complaint next to the SEC and contained by both cases I enjoy gone the brokers. Scottrade and Ameritrade. Right very soon I do NOT trust ANY broker to toy with my sale directives.