What is the Utility Theory in Economics?Utility theory is a theory in economics that emphasizes individuals' choices. This theory explains the behaviour of individuals based on the idea that people make choices based on preferences. Each individual has a different preference. Thus, everyone will make personalized decisions. These preferences are inherent to each individual and not changeable. Utility theory seeks to explain how individuals' decisions and behaviours can change based on their preferences. The primary focus of the utility theory is that individuals will prefer decisions that provide the most utility for their given preferences. In some cases, measuring utility from a given decision may not be possible. However, this theory assumes that individuals behave as if they make a decision by assigning an imaginary number to it. According to the utility theory, individuals translate different levels of monetary values into "utils". Util is a hypothetical unit that measures utility. Then the individual processes the decision in utility terms. These terms may often contradict the generation of wealth as some individuals have different goals. Based on that utility approach, investors make a decision. What is Utility?Utility in economics represents the total satisfaction that consumers get from the use of goods or services. It measures the benefit that consumers can extract from specific goods or services. However, quantifying the utility that consumers get from goods or services is challenging. Despite that, there are several economic models that attempt to measure it. Most of these models that believe in rational choice assume that investors will always extract the maximum utility from goods or services. However, utility isn’t a concept that only applies to economics. It also has its application in finance and investing. In finance, utility refers to how much investors can benefit from their portfolio’s performance. How does utility apply to finance?As with utility in economics, utility in finance also assumes that investors will seek to maximize their utility. In this case, the utility comes in the form of returns from the portfolio. Therefore, utility in finance relates to the high returns that investors expect from their investments. However, these high returns also come with risks. Usually, there is a direct relationship between both of these concepts. Due to the high risk on high return investments, investors also face the possibility of making substantial losses. Therefore, investors need to understand the utility they can get from various investments. This way, they can make better decisions and choose stocks that meet their requirements. The utility theory in finance assumes that, given a choice, investors will select the highest return investment option. However, they will also factor in their risk attitude. What are the assumptions made by the Utility Theory?The utility theory assumes that individuals can rank all decisions in some order based on their preferences. Similarly, this theory also presumes that individuals will also prefer more utility to less utility. The utility theory also makes the convexity assumption on preferences, suggesting that preferences are convex. Lastly, this theory assumes that all individuals base their decisions on rationality. ConclusionThe utility theory in economics seeks to explain individuals' behaviours based on preference. This theory suggests that individuals seek value in everything and use that to make decisions. The utility theory in economics also applies to finance. In that case, it looks at how individuals base their decisions based on risks and returns. Originally Published Here: Utility Theory in Economics
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The use of computers in the field of finance and investing has become more prevalent. Like many other fields, the concept of artificial intelligence has also had its applications in these fields. One such way that computers have changed the investing world is the introduction of algorithmic trading. This process has made the process of investing more automated. What is Algorithmic Trading?Algorithmic trading is a type of trading process used by investors to conduct investment transactions through computers. In this process, investors use software to analyze stocks and make investing decisions. Before that, investors provide instructions to the software, which it follows during the investing process. The software considers various factors and can allow for dynamic decisions at a quick rate. Algorithmic trading uses algorithms to analyze investments and identify ones that meet a set of specific conditions. Through the use of algorithms and human instructions, algorithmic trading allows for quicker and better investing decisions. Algorithmic trading is prevalent in various areas, such as high-frequency trading. How does Algorithmic Trading work?Algorithmic trading works through software that takes a set of instructions from investors. With those instructions, algorithmic trading processes a large amount of information. Based on that process, it trades at high speeds to allow the investor to profit. Algorithmic trading helps investors in making both buying and selling decisions in the market. Algorithmic trading can accept specific instructions about price, quantity, risk, timing, type, etc., from investors. On top of that, it can also provide investors with the option of purchasing liquid or profitable investments. Algorithmic trading is available to all levels of investors, including individual and institutional investors. What are the advantages of Algorithmic Trading?The biggest advantage of algorithmic trading is the speed and efficiency with which it makes investing decisions. It can process a substantial amount of information in a relatively short amount of time, which is not possible in manual investing. On top of that, algorithmic trading helps in the automation of the investing process, allowing investors to take a passive approach to investing. Mostly, algorithmic trading is prevalent among institutional investors. They can use it to make large investments while minimizing the market impact. This way, it provides a level ground for everyone to make investments. It also allows investors to specify the rules for the trades they want to make. Similarly, it can incorporate methods to avoid or limit losses that investors make. What are the disadvantages of Algorithmic Trading?Although algorithmic trading automates the investing process, it may not have the same benefits as manual trading. When investors specify the instructions for trading, they limit their investment to those criteria. Consequently, the software misses profitable investments that the investor would otherwise catch. The use of algorithmic trading also increases the speed with which investments get carried out in the market. This speed can also cause issues in the market. For example, a large number of transactions can cause liquid transactions to become illiquid. Similarly, the speed, paired with incorrect instructions, can cause significant losses for the investor in a short time. ConclusionAlgorithmic trading is a process that investors use to automate their investing through the use of software. An investor can control the investment by providing instructions to the software. Algorithmic trading allows investors to make investments with better speed and efficiency. However, it may also have some disadvantages, as stated above. Post Source Here: What Is Algorithmic Trading What is High-Frequency Trading?High-Frequency Trading (HFT) refers to a method of trading used by investors. This method involves using computer software to buy or sell large numbers of stocks or securities in a short time. Due to this characteristic, it gets the name high-frequency trading. Investors can use algorithmic programs to analyze various stocks and conclude transactions based on a set of instructions. High-frequency trading is crucial in markets that have a short timeframe for profits. Therefore, having a quick response for this period is critical for investors as it translates into more profits. Similarly, HFT includes a large number of transactions for that short period of time. Usually, institutional investors use this technique to make large profits. How does High-Frequency Trading work?High-frequency trading works through the use of algorithmic trading. This system uses software that can process a large number of transactions in a short time. Usually, this system takes instructions from the user. Based on that, it processes a significant number of investments and places orders accordingly. All this process usually occurs within milliseconds, allowing investors to make profits. Investors can also modify the software to include global markets and trade on them automatically. Due to the ease of conducting transactions on these markets, high-frequency trading allows investors to profit from various sources. The primary source of profits from this method comes from the speed and size of transactions that the software can make. What are the advantages of High-Frequency Trading?High-frequency trading allows investors to generate high profits in a short amount of time. Using powerful software, investors can identify even the smallest price fluctuations and place orders. Similarly, it allows institutional investors to gain significant returns on bid-ask spreads. Using algorithmic trading, investors can identify trends and patterns across various markets. High-frequency trading also allows investors to exploit arbitrage opportunities across markets using patterns. On top of that, it increases the liquidity of trades in the market. Furthermore, it promotes competition within the market, which can lead to better stability. It, in turn, causes bid-ask spreads to decline, leading to better price efficiency. Similarly, high-frequency trading also allows investors to limit their losses using several strategies. These may include stop-loss or stop-limit orders. This way, investors can close their position at a specific price to prevent losses. What are the disadvantages of High-Frequency Trading?High-frequency trading is a topic of interest for many people. Due to the short-term nature of transactions in this technique, there may be several issues that it can cause. Similarly, it uses trends analysis as a base for making decisions. HFT involves dealing with a large number of investments for a short time. While it can be profitable, it can also cause substantial losses for investors. High-frequency trading also causes damage to other investors in the market. On top of that, it can increase market volatility or cause market crashes. Many regulations have come forward which try to limit or regulate HFT activity. ConclusionHigh-frequency trading is an algorithmic trading method used by investors. Using this method, investors use software to process a significant amount of investment information. Subsequently, they buy large numbers of investments based on the processed information. HFT attempts to identify investments with short-term price fluctuations and place orders. Originally Published Here: How High-Frequency Trading Works What is the Volume-Weighted Average Price?The volume-weighted average price (VWAP) represents a stock's average price, weighted based on the total trading volume. Usually, investors use it to determine the average price that the stock has traded on the stock market for a day. The volume-weighted average price considers two factors, the stock's price, and its trade volume. Using the volume-weighted average price for a stock, investors can determine the mean for the stock's price performance. On top of that, it also provides them with a method to identify trends and predict future performance. Furthermore, it allows investors to determine whether they are receiving the best price for their stocks. The volume-weighted average price is critical in algorithm-based trading programs. How does the Volume-Weighted Average Price?The volume-weighted average price measures the weighted average price for a stock adjusted by volume. This way, it allows investors to calculate trends and make a decision accordingly. Based on this information, they can buy or sell stocks without any significant impacts. The VWAP also provides a rule for investors to make decisions. Usually, investors buy stocks when the price falls below the volume-weighted average price. On the other hand, a stock price above this point will mean investors can profit from selling stocks. Using this approach, investors move the average back towards the volume-weighted average price. The volume-weighted average price is a significantly important tool for all investors, whether individual or institutional. What is the Volume-Weighted Average Price formula?The volume-weighted average price formula considers the average price and volume of a specific stock for a single day. It includes all of this information from the time the market opens up to when it closes. The VWAP formula only uses intraday information to calculate the average price. The volume-weighted average price formula is as below. Volume-Weighted Average Price = ∑ Price x Volume / ∑ Volume For the above formula, investors need to accumulate the price and volume data of a specific stock. After doing so, they must calculate the product of the price and volume for the data. Next, they must add all these products to obtain the numerator for the above formula. Similarly, they must sum up all the volume information to get the denominator part. Investors can also calculate the VWAP continuously throughout the day. For that, they must calculate the average price of the stock traded for the first five-minute period of the day. For that, they must calculate the sum of the high, low, and close price and divide it by three to obtain an average. Next, they must multiply it by the volume for the period. They can use this to calculate the VWAP for that period. Once calculated, investors can add the product of price and value from each period to the values calculated before. Next, they can calculate the updated volume-weighted average price formula. Throughout the day, investors can keep adding updated figures to the calculation to get the latest price. ConclusionThe volume-weighted average price is an average price for a stock that investors calculate based on a total trading volume. This price allows investors to determine the mean position for a stock’s price and make investment decisions accordingly. It also helps investors in confirming stock trends and maximizing their returns. Post Source Here: Volume-Weighted Average Price Formula Investors that are active in the stock market will come across two types of stocks. These include value and growth stocks. Both of these stocks provide varying risks and rewards. On top of that, there are several other differences that set these stocks apart. While there are no specific definitions for what value or growth stocks are, there are some distinguishing characteristics that each of these stocks illustrates. What is Value Stock?Value stocks represent any shares traded in the stock market that have a market value lower than their intrinsic value. Intrinsic value represents the present value of all expected cash flows from that stock discounted at an appropriate discount rate. As the market price for these stocks is lower than what they should be worth, value stocks represent undervalued stocks. Due to the lower prices, value stocks have the potential to realize their intrinsic value. If an investor buys value stocks, they have the opportunity to benefit if the stock’s intrinsic and market values equalize in the future. The primary source of return on value stocks is the income that investors will get from the price differences. What is Growth Stock?Growth stocks represent any shares traded in the market that have a significantly higher estimated growth rate. Usually, most stocks in the stock market promise growth. However, growth stocks illustrate a higher growth rate than the market average. It means that these stocks have the potential to outperform the market in the future. Unlike value stocks, however, growth stocks have similar market and intrinsic values. Therefore, investors do not have the opportunity to benefit from any profits from price differences. Sometimes, growth stocks may also come with a valuation higher than their intrinsic value due to the higher potential growth in the future. The primary source of return for investors with growth stock is the future growth in earnings. What are the differences between Value and Growth Stock?The above definitions of value vs growth stocks should allow investors to understand the differences between these stocks. However, there are some other characteristics that distinguish value and growth stocks. One of these differences includes the methods investors use to differentiate between value vs growth stock. Usually, investors calculate the intrinsic value of several stocks and compare it to their market value. On top of that, they may use ratios such as the price-to-earnings ratio, price-to-equity ratio, current ratio, etc. Based on these, investors can determine if a stock is undervalued. In contrast, investors look at metrics such as earnings per share, earnings before taxes, return on equity, etc., to identify growth stocks. Value and growth stocks also differ according to the company's size. Usually, value stocks come from large, well-established companies. The difference in their stock valuation may come from temporary factors. On the other hand, growth stocks may consist of companies of all sizes. However, these are not established companies. Instead, these companies have a substantial potential to grow in the future. Lastly, value and growth stocks are different in the risks they involve. As mentioned, value stocks are from well-established companies. Therefore, the risks involved in value investing are lower. However, these also provide lower returns. On the other hand, growth stocks have higher risks but come with potentially higher returns. ConclusionInvestors often confuse value and growth stocks. However, both of these are different from each other based on several characteristics. Value stocks represent undervalued investments that will return to their market value in the future. Growth stocks, on the other hand, are stocks that promise higher growth than the market average. Article Source Here: What is Value Vs Growth Stock What are Valuation Multiples?Valuation multiples are a group of ratios or multiples used to evaluate a company. For investors looking to compare between various investments, these multiples provide a comparison method. Valuation multiples consist of several tools to evaluate a company using financial metric comparisons. These multiples include assessing a single financial metric as a ratio of another metric for specific purposes. The aim of using valuation multiples is to make comparisons between several companies or businesses straightforward. These multiples aim to provide a company's financial and operating characteristics using a measurable ratio. However, investors must use metrics that have a logical relationship with a company's value to provide accurate measurements. What are the types of Valuation Multiples?There are various types of valuation multiples that provide investors with a tool for evaluation. These multiples come in two categories, including equity multiples and enterprise value multiples. Both of these are relevant tools for investors to use. However, they provide varying results as the former bases calculations on equity while the latter uses enterprise value. Equity MultiplesEquity multiples are relevant when investors make decisions about investing in stocks. These multiples base calculations on equity and do not consider other factors that enterprise value does. Therefore, it provides investors with a tool to only consider equity investments. These multiples involve calculating the ratios between a company’s performance and its share price. Some of the well-known and commonly used equity multiples are as below. Price-to-Earnings RatioThe price-to-earnings ratio (P/E) considers a company's stock price in relation to its earnings per share for a period. It is one of the most prominent ratios used by investors when evaluating company stocks. Price-to-Book RatioThe price-to-book ratio is another commonly used ratio that compares a company’s stock price to its book value per share. Price-to-Sales RatioThe price-to-sales ratio considers a company’s stock price in relation to its revenues. Enterprise Value MultiplesEnterprise value multiples vary from equity multiples. Enterprise value multiples consider a company’s enterprise value rather than its stock price. Through that, it also incorporates a company’s debt. For that reason, it is a better measure of a company's total value. Some enterprise value multiples include the following. Enterprise MultipleThe enterprise multiple provides a company's value by dividing its enterprise value by its EBITDA. Enterprise Value-to-EBITThe enterprise value-to-EBIT ratio is similar to the enterprise value. However, it includes depreciation and amortization in the earnings when calculating the ratio. Enterprise Value-to-SalesThe enterprise value-to-sales ratio is another commonly used valuation method. It considers the ratio of a company’s enterprise value to its sales. This multiple is useful for companies that have a negative EBIT or EBITDA. Why do investors use Valuation Multiples?There are various reasons why investors may use valuation multiples. These multiples provide valuable insights and information about a company. Valuation multiples also allow investors to quantify a company's performance and valuation. On top of that, these are easy to calculate for any company using financial statements. Consequently, valuation multiples also provide a way for investors to compare various options. ConclusionValuation multiples are a group of financial metrics that allow investors to evaluate a company. There are many valuation multiples that investors can use. These come in two categories, namely equity and enterprise value multiples. Each of these categories has specific uses. Investors use valuation multiples for various reasons, for example, comparisons, evaluations, etc. Article Source Here: What are Valuation Multiples Options are complex financial instruments that often attract sophisticated traders and investors. In investment banks and hedge funds, they’re often the instrument of choice when one wants to engage in sophisticated trading strategies such as volatility arbitrage, dispersion trading. Another important role of options is for hedging and risk management purposes. Recently, there is a growing trend in the use of options in directional trading; that is, investors overlay options on an existing directional strategy. A recent article [1] examines the use of options as instruments for technical/directional trading. The author proposed a strategy as follows, When SMA(50) is above (below) upper (lower) bollinger band a call (put) spread (selling call (put) out of the money and the buying a further out of the money call (put)) slightly out of the money with an expiration date of 4 days. This strategy can be done with index, stocks, commodities and forex. The author then evaluated this strategy on 2 US stocks and an index ETF. He concluded, Starting hypothesis were correct, options are a really flexible financial derivative for trading and could be an effective means for trading if are supported by a correct use of technical analysis. Using leverage in low volatility periods often led to higher profits. This strategy perform well in financial markets and the author believe that it can be improved with some effort maybe selling naked options or using as described before as call spread on vix to hedge black swan events. For further improvement a trader can evaluate selling call spread out the money, in case of SMA (50) over upper bollinger band and buying a put spread out of the money. The strategy could be implemented with an important money allocation on low volatility periods while using a far lower capital during higher volatility periods. It will be necessary to open maximum one trade during low volatility periods and not more than three on high volatility. Capital not used could be invested in SP500 giving to the trader a much higher profit. The results are consistent with our experience. However, the article did not discuss important points such as,
References [1] F. Carlier, A Simple Options Trading Strategy based on Technical Indicators, International Journal of Economics and Financial Issues, 2021, 11(2), 88-91. Article Source Here: Overlaying Options Spreads on a Technical Trading Strategy A nation's economy is its state in terms of production and consumption of goods and services. It also includes other factors, such as the supply of money. Based on these factors, a country's economy may undergo several fluctuations over a period of time. Usually, there are various stages that an economy goes through. These stages come under the business cycle. What is a Business Cycle?The term business cycle represents a cycle of fluctuations in a nation's gross domestic product (GDP) over a period of time. It shows a country's growth or demise in economic terms over some time. Therefore, it can be critical in analyzing the country's economy. It considers a country's natural growth rate over a long period of time. The business cycle explains any fluctuations in a country’s economic activity over time. The business cycle has several stages that each nation goes through. Based on some indicators, it is possible to identify a country’s current stage in the business cycle. Therefore, it can also help make better financial decisions. Some other names used to describe the business cycle are the economic cycle or trade cycle. How does Business Cycle work?A single business cycle may expand over several years for an economy. During this period, the nation's economy will experience a boom and a contraction in sequence. There are also two other stages involved in the business cycle. These include the peak stage and the trough stage. However, these can be generalized as expansion and contraction as well. A business cycle starts with an expansion and reaches its peak stage. At that point, it will experience a recession, which is a downward movement towards a contraction. The economy then suffers a depression, finally leading to the trough stage. At this point, the economy recovers and moves towards expansion. This cycle continues in the same sequence. What are the stages of a Business Cycle?A business cycle consists of four stages. These include the expansion, peak, contraction, and trough stages. Each of these stages has some characteristics that can indicate the country’s current position along the business cycle. ExpansionThe expansion stage of the business cycle features an increase in economic indicators. During this period, a country's GDP grows due to a rise in income, demand, supply, wages, employment, etc. There are optimal points that each factor reaches, such as inflation nearing 2%. Economic expansions can last for a long time if the conditions are favourable. PeakThe peak stage is when an economy is at its highest point. It is the second stage of the business cycle after expansion. At this stage, a country's economy has reached its ceiling for growth. Usually, there is no further or only limited growth. The peak stage is the transitional period between expansion and contraction. ContractionThe third phase in the business cycle is the contraction period. During this period, a country's economy weakens, and economic activity decreases. All the above factors, such as employment, demand, supply, income, etc., also decline. The contraction period then leads to the trough stage in the business cycle. TroughLike the peak, the trough stage in the business cycle is when the contraction is highest. Usually, a country's GDP will become negative at the trough. However, there is limited or no decline in economic activity. At this stage, the decline is at its peak. After the trough period, the economy usually recovers and enters into an expansion. ConclusionThe business cycle is a cycle of expansions and contractions in a country’s economy. It explains the fluctuations in economic activity for a country over a period of time. There are several stages in the business cycle, each of which has specific characteristics. These stages include expansion, peak, contraction, and trough. Article Source Here: What is Business Cycle? What is Gross Domestic Product (GDP)?Gross Domestic Product (GDP) is a monetary value used to track a county's economic health. It represents the total market value of all the finished goods and services produced within a country over a specific time. There are several factors that can contribute to a country's gross domestic product. Usually, these include consumption, investments, government spending, exports, and imports. Usually, GDP calculations are available on an annual basis. Among the various factors that it considers, exports and imports play a significant role in determining a nation's GDP. Usually, if a country's exports exceed its imports, its GDP will increase. This position is known as a trade surplus. Similarly, GDP may also include the effects of inflation on an economy, known as real GDP. What is Gross Domestic Product (GDP) Growth Rate?The gross domestic growth rate is a metric that measures how fast a county's GDP or economy is growing. It compares a country's most recent GDP with its previous GDP. These GDPs can either be on a quarterly or annual basis. It represents the percentage of change in the value of all goods or services produced in a nation during a specific time in relation to a previous period. A country's GDP growth rate specifies how much its GDP has increased or decreased over a period. There are several factors that may contribute to whether the rate will grow or decline. These include all the factors listed above that influence a country's GDP. Similarly, a nation's government policies also play a role in affecting its GDP growth rate. While most countries prefer GDP growth, a significant increase in GDP can also be problematic. This growth can lead to increases in inflation, which can cause interest rate increases as well. In contrast, a decreasing GDP is always adverse for countries. Nations that undergo a continuously decreasing GDP may enter into a recession. What is the formula for GDP Growth Rate?The formula for GDP growth rate requires users to obtain a nation’s current GDP and its GDP for the previous period. Once they do so, they can calculate the GDP growth rate using the following formula. GDP Growth Rate = (Current GDP - Previous GDP) / Previous GDP The above formula may return a positive or negative ratio that specifies whether a country’s GDP has grown or fallen. Usually, users use a country’s nominal GDP to calculate the GDP growth rate for it. However, they also have the option to use real GDP for this purpose. Users can also calculate a nation's annual GDP growth or quarterly growth using the formula. However, the quarterly growth calculation is more common. ExampleUSA's nominal GDP in the year 2019 was $21,439 billion. The country's GDP in 2018 was $20,580.2 billion. Therefore, the USA's GDP growth rate from 2018 to 2019 will be as follows. GDP Growth Rate = (Current GDP - Previous GDP) / Previous GDP GDP Growth Rate = ($21,439 - $20,580.2) / $20,580.2 GDP Growth Rate = 4.17% ConclusionGross Domestic Product (GDP) is a term used to describe the total market value of all finished goods and services produced in a country over a specific time. GDP calculation includes several factors, including a country’s consumption, investments, government spending, exports, and imports. GDP growth rate is a metric that measures the growth or decline rate of a country's GDP. Article Source Here: Formula for GDP Growth Rate The use of different types of orders to mitigate risks is prevalent among investors. Through these, investors can manage or limit the potential losses they make in the market. Investors can use one of two tools to do so. These include stop-loss and stop-limit orders. However, these are both different from each other in several aspects. It is crucial to understand what each of these is to understand the differences. What is a Stop-Loss order?A stop-loss order represents a type of order to buy or sell a security at a specific price placed by a broker. The primary purpose of a stop-loss order is to limit the losses that investors make. With a stop-loss order, investors can specify a specific level for the loss they make in a trade. If the trading position reaches that level, the stop-loss order gets executed. Ideally, investors set their stop-loss limit at a level that allows for some fluctuations. However, this level should also protect the investor against an adverse market position. This strategy applies to both when an investor buys or sells their stocks or securities. With buy stop orders, investors set the stop price above the current market price. For sell stop orders, they can order the broker to sell if the stock or security reaches a specified stop price. With stop-loss orders, investors can limit their risk to a specific amount during adverse market fluctuations. Stop-loss orders are beneficial in mitigating against both long and short positions. On top of that, these orders can also help investors lock a specific profit in a trade. However, stop-loss orders are different from stop-limit orders based on the time they get executed. What is a Stop-Limit Order?A stop-limit order is different from a stop-loss order. With a stop-limit order, investors can mitigate their risks by specifying the highest and lowest price for their stocks or securities. These include a stop and a limit price. The stop price defines the level at which the broker will buy or sell the stock after it reaches a specific point. A limit price is an order to buy or sell a specified number of stocks or securities when their price arrives at that point. With stop-limit orders, investors can get control of both the minimum and maximum prices for each order. That is the primary difference between stop-limit and stop-loss orders. With stop-limit orders, investors can place a limit on the price at which the order will execute. With this, investors will get a guarantee for a price limit. However, the trade may not get executed. A stop-limit order is beneficial in protecting investors against volatile market fluctuations. Investors can set a limit for their stop orders. However, it does not guarantee that the transaction will occur while the stop-loss order can. In cases where the stock or security prices decline rapidly beyond the stop-limit price, the order will not get executed. ConclusionOrders can help investors give instructions to brokers to fill their trades. Investors can use stop-loss or stop-limit orders to mitigate against risks. A stop-loss order allows investors to specify a price point for brokers to buy or sell stocks or securities. With a stop-limit order, investors can define a minimum and maximum price for their trades that they are willing to accept. Article Source Here: Stop-Loss Vs Stop-Limit Orders |
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