Stop-loss order

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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).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
This is all the more reason to not use stop-loss orders for ETFs in addition to individual issues.
It is just as likely that several unconnected factors (light hedge fund selling, a concentration of stop-loss orders and destabilizing feedback among computer-driven trading programs) came together to produce an unusually large and fast price move, defying the desire for a neat explanation.
Peirce and Richard bend over backward to portray King as a model soldier and genuine patriot who rebels against the stop-loss order not because of cowardice or politics, but because he feels personally betrayed by a government he's already served far beyond the call of duty.
As of May 2005, stop-loss orders are affecting 14,082 soldiers--almost 10% of the entire forces serving in Iraq with no end date set for the use of these orders.
Two relatively simple techniques that investors have to protect themselves from loss in these situations are stop-loss orders and short sales.
stop-loss orders. (6) As described in the official army press release,
As the $1,925 level was broken the selling accelerated on the triggering of stop-loss orders. However good trade buying then appeared which returned the price to a $1,934 close.
First he whaled away at Bush, tracing the shameful decline of this war resister from the moral Everest of his Quaker-like refusal to spill Vietnamese blood (or his own) to his latter-day militarist posturing and use of the National Guard as a de facto draft, with the draftees press-ganged into indentured servitude by stop-loss orders, now under court challenge.
But Army stop-loss orders (essentially a form of conscription) have "ended that option for many troops.
Faced with an acute shortage of men and women in uniform, the Pentagon issues stop-loss orders to prevent personnel from going back home even after their hitches technically end.
Most investors don't realize that they can name the amount they're willing to pay for a stock, or that they can accept on the sale of shares by using stop-loss orders.
So far the military has issued no stop-loss orders (which prevent service members from separating from the armed forces under certain conditions) that would suspend discharges based on "don't ask, don't tell." If a deployed soldier is discovered to be gay, discharge for homosexual conduct would require investigation and would likely be a low priority during combat.