| an order from a customer to a broker to sell a security if the market price drops below a designated level. |
| stop order n. An order to a broker to buy or sell a stock when it reaches a specified level of decline or gain in price. |
Stop Order
An order to buy or sell a security when its price reaches a particular point, thus ensuring a particular entry price, or limiting the investor's loss, or locking in his or her profit. Also referred to as a "stop-loss order".
Investopedia Commentary
Investors commonly use a stop order before leaving for holidays or entering a situation where they are unable to monitor their portfolio for an extended period of time. Traders that use technical analysis will place stop orders below major moving averages, trendlines, swing highs, swing lows or other key support or resistance levels.
Related Links
The Stop-Loss Order - Make Sure You Use It
Trailing-Stop Techniques
Limiting Losses
The Basics Of Order Entry
Trading The MACD Divergence
See also: Buy Stop Order, Limit order, Resistance, Stop-Limit Order, Stop-Loss Order, Stopped Out, Support, Swing High, Swing Low
Also spelled: stop loss order, stop-order
stop order
An order to buy or to sell a security when the security's price reaches or passes a specified level. At that time the stop order becomes a market order and the executing broker, usually the specialist, obtains the best possible price. A stop order to buy must be at a price above the current market price and a stop order to sell must have a specified price below the current market price. See also buy stop order, electing sale, protective stop, sell stop order, stop-limit order, stop price, trailing stop.
An order from the SEC suspending a registration statement when an omission or a misstatement has been found.
