Order Types
An investor owns 100 shares of XYZ stock currently trading at $50. To protect against a decline in price, the investor should place a:
BLiSS = Buy Limit, Sell Stop go BELOW market. SLoBS = Sell Limit, Buy Stop go ABOVE market.
Complete Analysis & Legal Rationale
A sell stop order placed below the current market price protects a long position. If the stock declines to the stop price, the order triggers and sells the shares to limit losses. Remember "BLiSS" - Buy Limit and Sell Stop go below the market.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.