trailing stop

(redirected from Trailing Stops)

Trailing Stop

An order to sell a security when the price drops below a certain percentage of a given price. If the price rises, the trailing stop remains the same percentage below the new price. However, if the price drops, the trailing stop remains the same.

For example, suppose an investor buys a security at $10 per share and sets a trailing stop at 20% below the price. If the price drops to $8, the security is automatically sold. If the price rises to $20, the trailing stop moves to $16. However, if the security is bought at $10 and the price drops to $9.50, the trailing stop remains at $8. Likewise, if the price rises to $20 and then drops to $18, the new trailing stop remains $16. See also: Advisory account.

trailing stop

A stop order to sell (or to buy) a security in which subsequent stop orders are placed at progressively higher (or lower) levels as the stock price increases (or decreases). For example, an investor may purchase shares of Union Pacific Corporation at $60 and simultaneously place a stop order to sell the stock if it drops to $58 or below. If the stock rises to $63 without going through the $58 stop price, the investor raises the stop price to $61. Thus, the stop price trails the market price of the stock.
References in periodicals archive ?
I'm using ETFs with trailing stops for the stock exposure and mutual funds for most of the rest.
Lesson: Ride your big winner the few times you have one and use trailing stops to lock in profits.
Multiple stops, limits and trailing stops on each trade to manage risk
In the commodity space they were bullish, and they've been riding it out or adding, with trailing stops (stop losses).
Sierra's trailing stops enabled the firm to see this trend early, and Wright was able to exit the Fund's riskier holdings before those asset classes started trending down.
Use trailing stops to exit because it will allow you to capture maximum profit.
If this is not the case, I will keep my second target relatively close while protecting profits and trailing stops.
Although buying individual stocks is not for everyone, if you are considering it, I would suggest using trailing stops or at the very least regular stops.
However, if your stock improves to $30, automatically, your trailing stops will be reset to $29.
Trailing stops are currently being filled in Cable, but this pullback should not damage the underlying bull trend that is currently influencing.
Money Management Planner: Users can develop multi-level money management strategies with customized combinations of profit and protective stop orders, including break-even and trailing stops.
I will continue to use trailing stops to protect the downside as you never know when the next bubble-bust will occur.