You are short 3,500 shares of a $40 stock and based on its chart, you believe the shares could rise to $45, but that there is a resistance level at that price and the shares will likely fall back and continue to fall to a price significantly below $40. If the shares are able to break through the $45 resistance level, they could rise by an additional $10 or more. To try to protect against a large loss on your position, which of the following orders should most likely be placed? Short sell order. Good-till-canceled stop-sell order. Market order to buy. Limit order to sell “in the money”. Good-till-canceled stop-buy order. None of the above answers is correct.

You are short 3,500 shares of a $40 stock and based on its chart, you believe the shares could rise to $45, but that there is a resistance level at that price and the shares will likely fall back and continue to fall to a price significantly below $40. If the shares are able to break through the $45 resistance level, they could rise by an additional $10 or more. To try to protect against a large loss on your position, which of the following orders should most likely be placed? Short sell order. Good-till-canceled stop-sell order. Market order to buy. Limit order to sell “in the money”. Good-till-canceled stop-buy order. None of the above answers is correct.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 9P

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