A buy stop order instructs a broker to purchase a security when it hits a strike price that is higher than the current spot price. Once the price hits that strike, the buy stop becomes a market order, fillable at the next available price. This type of order can apply to stocks, derivatives, forex or a variety of other tradable instruments. The buy stop order can serve a variety of purposes with the underlying assumption that a share price that climbs to a certain height will continue to rise.
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