Placing a stop limit order on a stock your short selling so if it goes up too high it automatically sells???

Question

Like with zecco.

Answer 1

Simple.

Basically you are looking to 'Buy to Cover'. So, if you short a stock XYZ at 25, and you want to get out of the position if it goes above 25.50, you would:

Enter a Stop Market order to Buy to Cover at 25.50. That way if the price goes above 25.50, the stop market order will be entered and the trade is over. Keep in mind, that market makers can see these orders and by putting them in place, you may find the market makers manipulate the price just to hit your order and get you out of the trade. See if Zecco has something called trade triggers that are not seen by the market. Ameritrade has Trade Triggers.

Answer 2

I think for stop loss , we should use stop order instead of stop limit. It is because if the stock price gaps up, the stop limit order won't be filled.

Answer 3

I don't know about stocks.  I wouldn't want to steer you wrong.