Knowing when to sell your ETF shares is never an easy decision. However, one easy way to protect your ETF portfolio during a declining market is to use a limit order. [10 Tips for Trading ETFs]
“One disadvantage of the stop order is that the order is not guaranteed to be filled at the preferred price the investor states. Once the stop order has been triggered, it turns into a market order, which is filled at the best possible price. This price may be lower than the price specified by the stop order,” Investopedia reports.
“The primary advantage of a limit order is that it guarantees that the trade will be made at a particular price; however, your brokerage will probably charge a higher a commission for the limit order, and it’s possible that your order will not be executed at all if the limit price is not reached,” it adds.
Tisha Guerrero contributed to this article.