What type of trading order might you give to your broker in each of the following circumstances?
Question:
What type of trading order might you give to your broker in each of the following circumstances?
a. You want to buy shares of Microsoft to diversify your portfolio. You believe the share price is approximately at the “fair” value, and you want the trade done quickly and cheaply.
b. You want to buy shares of Microsoft, but you believe that the current stock price is too high given the firm’s prospects. If the shares could be obtained at a price 5% lower than the current value, you would like to purchase shares for your portfolio.
c. You believe your shares of Microsoft are already priced generously, and you are inclined to sell them. But there is a chance that price fluctuations might result in a short-lived increase of a few dollars per share. If the share price were to rise by $4, you are convinced that it would be greatly overpriced and you would want to sell it immediately? P-968
Step by Step Answer:
ISE Investments
ISBN: 9781266085963
13th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus