When earnings are announced, it’s not uncommon that the stock price rises or falls by 10, 20 or even 30%. Usally I don’t put too much attention on quarterlies, because I take a long term approach. But when I tend to sell a stock anyway I’d like to avoid big losses.
So, in this case I want to sell the stock asap for a still reasonable price, when earnings fall short, but I’d like to keep it otherwise. I figured stop limit orders could solve just that problem.
Example:
WFM reported earnings…