Financial Industry Regulatory Authority (FINRA) Practice Exam 2026 - Free FINRA Practice Questions and Study Guide

When a client wants to sell a stock only if it reaches a specific price above the current market price, the appropriate choice is a sell limit order. This type of order is set at a price that is higher than the current market price, allowing the seller to specify the minimum price they are willing to accept. If the stock's price rises to or above this limit, the order is triggered and can be executed at the limit price or higher.

This mechanism benefits the seller because it ensures that they won't sell the stock for less than the specified limit price, allowing them to take advantage of potential upward movement in the stock's price while maintaining control over their selling price. Unlike other order types such as market orders or stop orders, which may execute at less favorable prices, a sell limit order prioritizes the seller's desired price point.

In contrast, other options serve different trading strategies or market conditions. A sell stop limit order would require the stock to first hit a specified lower price and then be limited to a price higher than that stop price, which does not align with the requirement of selling only above the current price. A market order would execute immediately at the best available current price, offering no control over the sale price. Lastly, a sell stop order