trailing stop

Also found in: Acronyms.

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 ?
The trailing stop offers a clear advantage in that it is more flexible in nature than a fixed stop loss.
There is no charge for using a trailing stop, but stop-loss orders are not guaranteed and you may be subject to slippage in volatile market conditions.
In a move that is anticipated to be widely welcomed by the firm's customers, ETX Capital will now allow clients the ability to place trailing stop orders in order to lock in their potential profits from volatile markets and manage their spread betting and CFD gains, and the many associated risks, more effectively.
In addition to competitive pricing and state-of-the-art security solutions, E*TRADE Canada provides customers with a broad set of tools and services to make the most of their online investing experience, including real time account balances, customizable trading platforms, direct market access, trailing stop orders, uncovered options trading, SmartAlerts and the IPO Centre online, to name a few.
Day trade Your Way to Financial Freedom, 2nd Edition tells readers: - How the stock market works - How to scan for winning stocks - How to buy low and sell high not buy low and sell lower - How and when to short stocks - The proper way to use a trailing stop - How to avoid the most common beginner mistakes - How to use technical indicators - Which analysis works best for the daytrader - Which brokerage to use and which to avoid - How to manage risk - How to prepare yourself for the fast pace of daytrading The accompanying CD will walk readers through actual trades.
Trailing Stop Phubbing, five other movements have already taken root.
In the commodity space they were bullish, and they've been riding it out or adding, with trailing stops (stop losses).
We want clients to love trading with us so we're committed to offering them access to the key markets they want to be in, on a platform that offers forex risk management tactics such as stop losses and trailing stops and the ability to balance their portfolios from a single trading account.
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.
Multiple stops, limits and trailing stops on each trade to manage risk
Trailing stops are currently being filled in Cable, but this pullback should not damage the underlying bull trend that is currently influencing.