buy stop order

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Buy stop order

A buy order not to be executed until the market price rises to the stop price. Once the security has broken through that price, the order is then treated as a market order. Also known as a suspended market order. Often used to protect against loss on a short sale.
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Buy Stop Order

A stop order that becomes a market order to buy a security if it rises above its current price. That is, a buy stop order is not executed so long as the security is at or below the price when the order was made, but is executed at the best available price when it rises above that order. An investor who makes a buy stop order operates on the premise that if a security rises, it will likely continue to rise. In other words, the maker of a buy stop order hopes to profit from a security's upward momentum.
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buy stop order

A customer's order to a broker to buy a security if it sells at or above a stipulated stop price. This type of stop order can be used to protect an existing profit or to limit the potential loss on a security that has been sold short. Compare sell stop order.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.