Question
if there was a crash in the stock market, is it possible that the sale of my shares triggered by stop loss limits that I have set as a safeguard, could be delayed by the amount of people trying to sell at the same time and the shares could end up being sold at a much lower price?Answer
Yes. A stop loss means the broker will sell your shares if they hit a 'trigger' price that you've specified. However, if the price is falling more quickly than the stockbroker can deal your shares may end up selling below the trigger price, i.e. there's no guarantee of the price you'll get.
The alternative is to use a limit order, which means the broker will only sell if they can get your specified price. However, this risks the shares not being sold at all if the broker is unable to sell at the trigger price - possible in a fast falling market.
if there was a crash in the stock market, is it possible that the sale of my shares triggered by stop loss limits that I have set as a safeguard, could be delayed by the amount of people trying to sell at the same time and the shares could end up being sold at a much lower price?Answer
Yes. A stop loss means the broker will sell your shares if they hit a 'trigger' price that you've specified. However, if the price is falling more quickly than the stockbroker can deal your shares may end up selling below the trigger price, i.e. there's no guarantee of the price you'll get.
The alternative is to use a limit order, which means the broker will only sell if they can get your specified price. However, this risks the shares not being sold at all if the broker is unable to sell at the trigger price - possible in a fast falling market.
Read this Q and A at http://www.candidmoney.com/questions/question727.aspx
No comments:
Post a Comment