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February 28, 2021

BVB to introduce ‘stop loss’ and ‘take profit’ orders

The Bucharest Stock Exchange (BVB) may introduce ‘stop loss’ and ‘take profit’ orders in July, at the beginning the users being only allowed to perform simulated operations via the BVB test system, said BVB Director General Anca Dumitru. ‘One of the measures we presented to our shareholders at the latest general meeting is the introduction of new order types from the ‘contingent orders’ category, which are executed following the performance on the main market of a transaction the price of which meets specified criteria. They will be available on the BVB testing system in July, where the users will be able to perform simulations’ explained the BVB official, according to Mediafax. ‘Stop loss’ is an order designed to limit an investor’s loss when the price begins to take an undesirable trend. The investor is free to set a maximum loss he/she is able to sustain and places such a selling order at a specific price, thus making sure it won’t fall any further during a period when the investor is unable to monitor the market. ‘Take profit’ is a profit marking order executable when a position hits a preset profit level. The order removes the risk that the market may reverse before the investor has a chance to notice that.

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