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Simple English definitions for legal terms
sell order
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A quick definition of sell order:
A sell order is when someone tells a broker to sell their stocks. It's like giving a command or instruction to sell a certain amount of stocks at a specific price. There are different types of sell orders, like a market order where the stocks are sold immediately at the best available price, or a limit order where the stocks are sold at a specific price. It's important to understand the different types of sell orders to make the best decision for your investments.A more thorough explanation:
A sell order is a command or instruction given by an investor to sell a certain amount of stock. It is a type of order that is placed with a broker to sell securities at a specific price or better. The sell order is executed when the stock reaches the specified price or higher.
For example, if an investor owns 100 shares of a company and wants to sell them, they would place a sell order with their broker. If they set the sell price at $50 per share, the order will be executed when the stock reaches that price or higher.
Another example is a stop-loss order, which is a type of sell order that is used to limit losses. If an investor owns a stock that is currently trading at $60 per share and they set a stop-loss order at $50 per share, the order will be executed if the stock falls to $50 or lower. This helps the investor limit their losses and protect their investment.