Reference no: EM131624134

Question: You have been researching a stock that is currently trading at $65, and you would like to invest in it. You believe that the price of that stock will increase during the coming months because of some favorable rumors and then drop after investors realize that the rumors were false. You put a market order to buy 100 shares and, simultaneously, put a GTC limit order to sell it at a price of $100. Finally, you put a GTC stop loss order for the shares at a price of $90 that will be activated two weeks from the initial investment. After a couple of weeks, your expectations are realized; the price of the stock increases significantly and reaches $96. A few days later, the stock begins to drop and reaches $77 at the end of the month. Explain what happens according to your strategy. What is your current position?