Stop-loss order

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Related to Stop-Loss Orders: sell stop order, Trailing Stop Loss Order, Trailing Stop Order

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 ?
Zinc: A $970/910 range over the week was a wide one for zinc as initially fresh fund buying drove the price up only to cause large fund profit taking and the triggering of stop-loss orders.
We identified a dollar value and instituted a stop-loss order to sell on it.
The stop-loss order is being implemented across active duty, the Air Force Ready Reserve and the Air National Guard for affected career fields in the ranks of airman through colonel, the Air Force said.
My dumbest investment was buying TTM Technologies without a stop-loss order on it.
In fact, at least one branch of the military has come remarkably close to admitting that stop-loss orders are tantamount to "a draft per se.
Another way to use limit orders on the sell side is to enter "stop-loss" orders with your broker, A stop-loss order is used primarily to limit losses on profitable stock positions.
There are rumours of a large stop-loss order in the market at around this area which, if hit, could take prices on a quick upward spike.
90 yen as buying by foreign short-term funds triggered stop-loss orders, but the dollar is unlikely to break the 116 yen line Friday as Japanese importers' sell orders are lined up above 115.
Stop-loss orders are usually issued during times of conflict in order to temporarily suspend administrative discharges.
As a result, Hannagan recommends that trades should be conducted with tight stop-loss orders.
10 yen, at which some investors had placed stop-loss orders.
The stop-loss orders, suspending some administrative discharges, have not stopped gay discharges.