A Buy Stop Order is a great tool for investors who want to ensure they get the best price on a security. When the price reaches the predetermined level, the buy stop becomes a limit or market order, which can be filled at the next available price. This sort of stop order can be used on stocks, derivatives, currencies and other trading assets. The purchase stop order may be used for a number of objectives with the underlying premise being that once a share price reaches a given level it will continue to grow.One benefit of using this type of order is that you don't have to constantly watch your stock prices and make decisions about whether or not to sell. You set it and forget it - until your stock hits your predetermined purchase point! Another benefit is that you're guaranteed to get into (or out) of your investment at least as well as you would have if you'd waited for an actual market event like an earnings release or takeover bid before making your move.There are some risks associated with buy stops: if there's heavy selling pressure in the marketplace when your stock hits its trigger point, then there's no guarantee that your trade will actually go through at what might end up being an unfavorable price; also, placing too many orders in different securities can flood the market and drive prices down instead of up (this is called "market manipulation" and it's illegal). But overall these risks are relatively low especially when compared against not using any stops at all!
