Stop-loss order

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Related to Stop loss: Stop Loss Insurance, Stop Loss Order, Stop Limit

Stop-loss order

An order to unwind a position when the price moves against you. This order is designed to limit losses or in some cases to lock in a certain level of profit. As soon as the price of the security hits the stop-loss price (or falls below), the order becomes a market order. If you were short the asset, the stop-loss would trigger a purchase. Stop-losses are often disabled for after hours trading because prices are often quite variable and you could be executed at an unfavorable price. Stop losses are also usually calculated off the bid price (which is a measure of what people are actually willing to pay if the security is sold). Again, one needs to be careful because if there is lack of liquidity, the bid-ask spread could be large and you could be stopped out at an unfavorable price. Finally, some traders have rolling or trailing stop loss. As the price moves up the stop-loss is moved higher (say 20% below the current price).

Stop-Loss Order

An order to a broker to buy or sell a security at the best available price once a certain, stated price is reached. Suppose that price is $50. A stop order remains inactive until that security begins trading at $50, at which point the broker may fill the order at best price he/she is able to find. A stop-loss order is technically the same as a stop order, but carries the connotation of avoiding further losses rather than seeking to cash in on future gains. See also: Protective stop.
References in periodicals archive ?
If the price of ABC Corp moves below your stop loss of 114.
Stop loss is medically underwritten, unlike individual or group policies.
HM's stop loss program is customizable to meet the needs of individual employers.
Say that the market was to go against you and hit your guaranteed stop loss of 5700; your trade would be automatically closed, preventing you from incurring any further losses.
In announcing the new partnership, Amalgamated Life President & Chief Executive Officer David Walsh commented that, "We are proud to be aligned with Elite, a well-respected member of the insurance industry, and for the opportunity it affords us to give more plan sponsors access to our high quality medical stop loss solutions.
Guaranteed Stop Loss Orders are the most efficient risk management tools available.
What Insurance Lawyers Need to Know About Stop Loss Insurance is a time efficient way to be in-the-know on stop loss insurance and its impact on insurance lawyers and their clients.
Meanwhile many new traders will choose to set their stop loss at the maximum loss they are willing to take on a trade.
Moulton To Administer Stop Loss Insurance Product From NLI America
The basic stop loss can be set at the outset of a trade and adjusted as activity progresses.
NYSE: HIG), one of the nation's largest financial services and insurance companies, announced today that it has reached a definitive agreement to sell its medical stop loss insurance business to National Benefit Resources, Inc.
You therefore decide to place a stop loss, which will close your trade at your desired price.