Stop-loss order

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Related to Stop Loss Orders: Trailing Stop, Limit Orders, 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 ?
Through your trading strategy, you should consider what you are willing to realistically lose or risk and this is typically where you can consider coordinating your stop loss order level to.
A Guaranteed Stop Loss Order (GSLO) can be used to ensure that the level at which an order will be executed is the exact level that's beenspecified by the trader, regardless of any gapping in the market.
A guaranteed stop loss order offers an additional level of certainty when managing your downside risk.
At City Index Australia, Guaranteed Stop Loss Orders incur a small premium (debited from your cash balance) upon confirmation of the order, and minimum distances apply.
Choose between a Standard and Guaranteed Stop Loss Order (GSLO).
Helping you to manage your trading risk by placing a Guaranteed Stop Loss Order (GSLO) on every position you make, a Limited Risk Account is an ideal starting point for new traders.
You can choose between a Standard and Guaranteed stop loss order ; with the latter offering the greatest protection, specifically if gapping occurs in your chosen market.
You can use a Guaranteed Stop Loss Order to ensure that should Rio Tinto reach 3500p, our systems will automatically close out your trade at this level, to prevent you from incurring any further losses.
There are a number of different stop loss orders to suit each trader's requirements, but in essence a stop loss is designed to close a trade when it hits a trigger price set by the trader.
Unfortunately, despite having a duty to do so, Merrill Lynch failed to protect the concentrated Weyerhaeuser stock position through the use of available risk management strategies, like a collar, protective put options, stop loss orders and/or an exchange fund.
Most importantly, Guaranteed Stop Loss Orders not only help to protect your funds, but also protect you against market gapping.
Once a stop loss order is triggered your trade will be closed at the next available price.