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Hi guys, hope you can help me with this one:
I saw a phrase in the CFAI curriculum (Equities and FI book) which I don't quite follow - what does "GTC, stop 65 RMB, limit 100 RMB buy" mean exactly?
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Comments
GTC means the order is good till cancelled. A buy order is activated at RMB 65 but the purchase price will never exceed RMB 100.
The word Stop (buy) here means that the buy order would be activated when the price reaches that level. Just as an example, if a stop buy order is put at $50, once the price reaches (or surpasses) $50, it becomes a market order. It's important to know that it doesn't necessarily mean that the executed price would be $50 though, as it could be higher.
Hope this helps!