Bracketed Orders in Stock Trading (3)

For example, you decide to buy 1500 shares from Company N, a new and upcoming business, at $625 each, for a total investment of $937,500.


You decided to purchase such a large amount of shares after consulting with your stockbroker because your broker was confident that Company N would be able to expand into a big business in which would create massive profits for your stock trading investment.



You placed a limit on your profit at $5 million, however, you did not place a limit on your losses because your stockbroker was so sure of Company N's success.



However, after only 3 months, Company N was forced to claim bankruptcy, where Company N is seeking a court order to discharge all of their incurred debt.



Obviously, you can kiss your $5 million profit good-bye along with your initial $937,500 investment.


Unfortunately, as an investor, you were willing to take a risk based on the expertise of your stockbroker, however, with this risk; you lost a large lump sum of money.