Stop Order

A trade order placed above or below the market’s current price level that is intended either to liquidate a losing trade (a “stop-loss” order) or to establish a new market position.

Stop orders become market orders as soon as their prices are touched. A stop-limit order specifies the worst price at which a stop can be filled, e.g., “sell 100 shares of DAL at 45 on a stop, 43 limit.”

Related Articles:

• Understanding Stop Orders: Part 1