Zero-Floor Limit

A zero-floor limit is a type of limit order that is placed at a price of zero. This means that the order will only be executed if the asset's price reaches or falls below zero. Zero-floor limits are often used by investors who are looking to protect their downside risk.

There are a few things to keep in mind when using zero-floor limits. First, it is important to understand that these orders are not guaranteed to be executed. If the asset's price does not reach or fall below zero, the order will not be filled. Second, zero-floor limits can be used to create a stop-loss order. A stop-loss order is an order to sell an asset if its price falls below a certain level. By placing a zero-floor limit at the same price as the stop-loss order, you can ensure that the order will be executed if the asset's price falls below the stop-loss level.

Zero-floor limits can be a useful tool for investors who are looking to protect their downside risk. However, it is important to understand the risks involved before using these orders.