Buy Stop Order

What is a Buy Stop Order?

 A buy stop order is an order to buy a security at a price above the current market price.

Explanation: 

This order type is used to limit a loss or protect a profit on a stock that has been sold short. It becomes a market order once the stop price is reached.

Practical Example of Buy Stop Order:

If an investor short-sells a stock at $100, they might set a buy stop order at $110 to limit potential losses if the stock price rises.

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