Bracketed Sell Order

A short sale of stock made with pre-specified conditions, depending on how the stock trades afterwards.

Eric is worried about the future of a publicly traded retro-bicycle manufacturer, Backpedal Co. (Ticker: BKUP), but not too worried. He wants to short the stock, but lacks conviction. He’s the kind of guy who likes to have his cake and eat it, too.

Luckily, Eric can place a bracketed sell order, whereby he shorts 100 shares of the stock, but simultaneously authorizes purchase of 100 shares if the stock trades up more than 2%. That way, Eric gets all the exhilaration of day trading...and all of the transaction fees.