Chapter 04 · Section 4.1

When a stop order is executed?

Buy 3 CBOE BankAm June 15 calls stop-loss 3 1/2.

A stop order, whether buy-stop or sell-stop, is executed when the market price gets:

a) as high as specified or higher.
b) as low as specified or lower.
• c) as bad as specified or worse.
  Yes. Stop orders are used to limit possible losses. Therefore they can only be executed as soon as prices get as bad a specified or worse. Continue
  d) as good as specified or better.

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