Stop Order for Short Positions?

[Cburg]

Hi Forum,
Could someone tell me what type order one would use to protect against a short position going the wrong way?
Thanks!
Cburg
:|

 

[N Rothschild]

depends what your trading but normaly a buy stop

 

[joeking323]

Hi Forum,
Could someone tell me what type order one would use to protect against a short position going the wrong way?
Thanks!
Cburg
:|

STOP ORDER: Stop Order can be used for three purposes:
1) to minimise a loss on a long or short position.
2) to protect a profit on an existing long or short position
3) to initiate a new long or short position

 

[Rhody Trader]

depends what your trading but normaly a buy stop

There's no "depends". If you are short you must buy to close. That being the case your stop is a buy stop.

 

[N Rothschild]

yeh but some brokers use just a stop order like said above

 

[raysor]

You want to insure yourself against the price going up too much. Therefore, as said, you need to close a short position (sell) by a buy trade. Therefore you set a purchase stop at which you don't want to see the price higher (or at which point you do not still want to be short).

 

[Rhody Trader]

yeh but some brokers use just a stop order like said above

A stop order to buy is a buy stop. Same, same.