Bracketed Buy Order

A Bracketed Buy Order lets an investor put rules on their share purchase in the form of a buy order, a sell limit order, and a sell stop order.

The benefit is that the investor can limit their loss. The downside is that the investor also limits their gain.

For instance, say you want to buy a stock for $20, with a sell limit order at $25 and a sell stop order at $15. If the price of that share moves up to $25 or down to $15, the share is sold automatically. The nice thing about this arrangement is that an investor can specify how much they want to spend and how much they're willing to risk all at once, and not have to monitor the stock all the time to decide when to sell. The downside is that the investor could miss out on a potential gain if the market shifts suddenly and they can't change their bracket amounts before the stock sold.