Can a stop order impact the price of a stock?

A stop order can indeed impact the price of a stock, especially if there are many stop orders set at the same price. When a stock reaches the specified stop price, the stop orders convert into market orders, which can lead to a flurry of buying or selling activity. If numerous traders have stop orders set at the same level, this collective action can create significant price movement once the stop price is triggered. Therefore, option B is correct as it recognizes the cumulative effect that multiple stop orders can have on market dynamics, potentially leading to increased volatility and impacting the stock's price.

In contrast, the other options do not fully capture this aspect. Saying that a stop order only affects the individual trader overlooks the broader market implications when multiple traders set stop orders at the same price point. The suggestion that a stop order would only impact the price if it is a limit order is misleading because limit orders operate differently from stop orders and have different mechanisms for executing trades. Lastly, the assertion that a stop order can impact the price but requires immediate market execution does not accurately represent the nature of stop orders, which are designed to become market orders upon being triggered, rather than requiring immediate execution from the outset.