protective stop

Protective Stop

An investment strategy designed to limit losses on a security by means of setting up a stop-loss order or stop-limit order. For example, a protective stop may involve an investor giving an order to his/her broker to sell a stock if its price drops more than 5% below what the investor paid. So, if the investor paid $30 per share, the protective stop would mean selling automatically if the price reached $28.50. Protective stops are risk averse and assume that if the price reaches (in this case) $28.50, it will continue its downward trend.
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protective stop

A stop order that protects gains or limits losses of an existing investment position.
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.
References in periodicals archive ?
"Traders may go long in Sabic from current levels of 114.50 riyals for a target of 126 riyals in the short-term, but must have a protective stop loss placed under 112 riyals," Prakash said.
Maintaining production becomes more challenging when the pHRI is continuous [8] since the robot has to operate at a greatly reduced speed to ensure it can initiate a protective stop quick enough to minimize the impact force if contact is made.
Current collaborative applications detect a collision as it occurs and react by initiating a protective stop. The robot's forces and speeds are limited when the potential for collision is high so harm during a collision is minimized.
There are two types of stops, emergency stop and protective stop, and each one is active for different reasons [6,14].
Any detected failure in the safety-related parts of the control triggers a protective stop. With industrial robots the protective stop is initiated by safeguarding devices.
Long positions if created must have a protective stop loss placed below its previous low at Dh5.48," Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities (FABS), said.
<strong>What if the market reverses just before hitting my target?</strong><br> Make a protective stop to break-even when/if the market moves halfway to your target.
Traders opting to buy on dips must place a protective stop loss just below the support level of Dh7.80," said Shiv Prakash, senior analyst with National Bank of Abu Dhabi Securities (NBADS) in a note.
Also, AlgoTrades adjusts protective stops and profit targets, uses advanced filters to monitor the market on a tick-by-tick basis carefully evaluating each entry, profit or loss, and stop placement level in real time.

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