Question
Suppose you take a long position in 6 crude oil futures contracts at a futures price of $45 per barrel. Assume that you want to
Suppose you take a long position in 6 crude oil futures contracts at a futures price of $45 per barrel. Assume that you want to hold your long position, but you are worried that the crude oil futures price might collapse. You definitely want to close out your futures position if the crude oil futures price falls to $35 per barrel. What type of order should you place with your broker?
A market sell order for 6 contracts
A stop-loss sell order for 6 contracts with stop price of $35 per barrel
A limit sell order for 6 contracts with a limit price of $35 per barrel
A limit sell order for 6 contracts with a limit price of $45 per barrel
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