This pertains to an event that causes a change in the price of a security and can be internal or external.

  • External Triggers:
    External triggers are typically news events that prompt investors to either buy or sell a security based on the information disclosed.
  • Internal Triggers:
    Internal triggers encompass changes in the price or volume of a security, often influencing investor decisions within the market.

For instance, consider a scenario where a stock has a trigger price set at $20. If the stock price dips below $20, the trigger is "activated," leading to the automatic sale of the stock.

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