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An executed stop order. A stop order is an order to a broker to sell a security once a certain price is reached. Once the price is reached and the security is sold, the position is said to be stopped out. Usually this refers to the protection of the investor from further losses in a time of declining prices.
Having an order executed at a specified stop price. For example, suppose Union Pacific stock trades at $65 and an investor enters a stop order to sell 500 shares at $62. If the stock price subsequently falls and the order is executed at $62, the customer is stopped out.