Bracketed Buy Order Definition & Trading Example

Bracketed Buy Order Definition

A bracketed buy order is when three orders are placed simultaneously in order to take on a long position.  There are three components of a bracketed buy order:
  1. Initial Long Position
  2. Limit Sell Order
  3. Stop Market Loss Order

Why Use A Bracketed Buy Order

Traders like this trading style, because the investor knows exactly where they are looking to lock in profits as well as protect against losses.  Thus removing a lot of the guess work and uncertainty associated with trading.

Bracketed Buy Order Trading Example

In the below trading example a trader entered a bracketed buy order at $24.17 for Bank of America.  The trader then places a stop market order below the October 10th, low and a sell order at the first gap down at $34. 

Bracketed Buy Order
Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...
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