A Bracketed Buy Order lets an investor put rules on their share purchase in the form of a buy order, a sell limit order, and a sell stop order.
The benefit is that the investor can limit their loss. The downside is that the investor also limits their gain.
For instance, say you want to buy a stock for $20, with a sell limit order at $25 and a sell stop order at $15. If the price of that share moves up to $25 or down to $15, the share is sold automatically. The nice thing about this arrangement is that an investor can specify how much they want to spend and how much they're willing to risk all at once, and not have to monitor the stock all the time to decide when to sell. The downside is that the investor could miss out on a potential gain if the market shifts suddenly and they can't change their bracket amounts before the stock sold.
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Finance: What are Limit Order, Sell Limi...7 Views
Finance a la shmoop what is a limit order? you want to sell a thousand shares
of Colonel electric it was demoted after they cut their dividend the shares have [Scissors cuts dividend in half]
been trading wildly between $15 and $25 a share you don't want to feel like a
moron for having sold them at fifteen bucks when six weeks later they kissed
25 with tongue so what do you do well you put in a limit order that is you put
a limit of a minimum price of 25 bucks a share for Colonel Electric such that [Pile of stocks appear]
those shares will simply sit in your account unsold maybe forever until
somebody out in the wild blue yonder of Stockland is willing to pay twenty five [Woman standing at a colonel electric stand]
dollars or more for the shares where you have a minimum price limit of 25 bucks a
share in your order so here's to hoping they sell and don't get further demoted [Man carries stock into car]
Sargent Electric is just a place you don't want to go
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