gather in the stops

Gather In The Stops

A trading strategy of driving down a stock's price by selling large amounts of stock in order to trigger preset stop-loss orders, which in turn enhances the decline of the stock.

Notes:

This strategy may seem confusing at first, but is actually rather simple. Gathering in the stops occurs when traders sell large quantities of stock with the intention of triggering stop orders. Once a set of stop prices is reached, new sell orders are activated and transacted, causing the stock price to fall once again. This effect is continuously repeated, triggering more stop orders and therefore a rapid decrease in the stock's price. Some exchanges may decide to suspend stop orders to mitigate this continuous effect.

See also: Exchange, Nasdaq, NYSE, Order, Sell, Stop-Limit Order, Stop Order

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Gather in the stops

A market strategy in which investors sell stocks to drive prices to a level that breaks through stop orders known to exist. Once the price is low enough, the stop orders become market orders and are executed, to create snowballing.

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gather in the stops

To sell shares in order to drive down the price of a stock to a level that will activate stop orders that place additional downward price pressure on the stock.