Do I place stop or limit order on a stock?

I purchased a stock at $1. It's trading at $1.80. I want to make sure I sell it if it goes down to $1.30. Do I place stop or limit order?

Stocks
Answers
Sort By:
Most Helpful
October 2016
67% of people found this answer helpful

You can do that, but low price stocks often trade on thin volumes. If that is the case, you need to be very careful. You don't want to automatically sell shares just because some dope put a large block up for sale at the market price and drove the price down sharply on a temporary basis. You can put a stop limit that will put a floor under the price as well, so that it wouldn't execute below a certain level. So pay attention to liquidity and volatility in these small stocks. Call your broker's trading desk if you are unsure what to do.

March 2017
October 2016