Stock Trading Question!!?

Question

Assume I purchased a stock @ $100/share, currently trading @ $125. What kind of order should I place in order to assure a profit of $30/share??
Additionally, what kind of order should I place in order to assure a profit of $20/ share?

Thanks!

Answer 1

If you want to make a profit of $30/share (there would be no assurances since the market is below that price now) you would place a "Sell Limit" order at $130 - you could make it for the day or Good Til Canceled (GTC)

If you want to assure a profit of $20 (likely since the market is above 120) - you would place one of two orders:

"Sell Stop" at 120 - when and if the stock dips down to 120, it will become a "Market Order" and execute at the immediate price (may be more or less than 120)

"Sell Stop Limit" at 120 - same as above except that when it dips to 120, it becomes a limit to sell for no less than 120 - potentially dangerous if the stock price drops dramatically since it may never stay or get back to 120 if it drops through.

Answer 2

A limit order at $130 will automatically sell the stock if it ever goes up to that price. A stop order at $120 will automatically sell the stock if it ever goes down to that price. Note that when a stop order is triggered it will sell at the current market price, which should be close to 120 unless the stock price is falling very rapidly.

Answer 3

there are two main types of orders you can place:

1) "market order" which will sell your stock at the current market price.

2) "limit order" which will sell your stock at a price you specify.

If you want a 100% assured profit of any amount I suggest you use a limit order. If the price you specify is below the current market price your order will execute right away at the market price. If the price you specify is higher than the current market price your order will not execute until the specified price is reached OR if the order expires (with limit orders you have to pick "good until cancel" or "day order" which is when the order will be automatically cancelled if it does not execute)

hope that helps!