Bracket Orders
When trading in a volatile market, you should protect your downside, while putting yourself in a position to get out of the shares once your price target has been reached.
Bracket orders are designed to limit your loss and lock in a profit by “bracketing” an order with two opposite-side orders. A BUY order is bracketed by a high-side sell limit order and a low-side sell stop (or stop-limit) order. A SELL order is bracketed by a high-side buy stop (or stop-limit) order and a low side buy limit order.
There are 2 investor types. Those who don’t want to take the loss and those who don’t want to miss the gain. A bracket order will work for both.
Related articles:
