If the investor is my client, i will advise him to enter a buy stop order at $40.
In the share market, these are protective tool that are mainly for short sellers.
Now, as the stock should begin to rise from its current price of $38, once it reaches or exceeds $40, a buy order at the market is entered.
Hence, the stock purchased is used to cover the short position and the investor's profit is the $50 sale price minus the cost of the purchase.
However, because the investor is short term person, the only protective order would be a buy and not a sell.
Therefore, i will advise him to enter a buy stop order at $40
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