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 Glossary:

Buy Stop Order

Buy stop order - always placed above the current market price.

Used to limit the potential loss on a short position.

When you sell a stock short, it is always a good idea to put in a buy stop orderDefinition just in case the stockDefinition goes through the roof because of an unexpected change in circumstance.

This way you can buy the stock back at a predetermined loss such as 20%.

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 Buy stop order - some related terms:
Stop order
Stock

Orders entered above the market




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