A stop loss order is given when the market is:a. Highly volatile b. Experiencing a downtrend c. Experiencing...

A stop-loss order is placed
when the trader wants to limit the losses made. These are usually used when there is a
lot of leverage involved in the transaction made. As (1) the funds that have been
borrowed to execute the trade have to be returned on time and as (2) it is not possible
to hold onto the security while waiting for a reversal in price to recover, a stop-loss
is used so a limit is placed on the losses that the trader can
afford.

The correct option for the question would be option
e, none of the above.

A very high level of volatility can
make the price fluctuate upwards and downwards. Placing a stop loss would not serve any
purpose as the position could become profitable after a very brief interval of
time.

A downtrend or a Bull Run could make a trading
position unprofitable or profitable based on whether the trader has gone long or
short.

Inactivity would not allow any trades to take place,
whether a stop-loss order has been placed or not.

The
primary reason a stop-loss is used is to accommodate for
the use of leverage (borrowing, margin) if it is not
possible to hold onto the position and wait for a reversal
in price to make the position profitable again. Stop-loss orders can be essential in
many situations but in others may lead to losses that could easily have been avoided if
the stop-loss order had not been placed. It requires a lot of experience and skill to
determine what should be done and when it should be done.