Market-With-Protection Order

AAA

DEFINITION of 'Market-With-Protection Order'

A type of market order that is canceled and re-submitted as a limit order if the price of the asset moves dramatically after the investor places the order. The limit on the limit order is placed at around the current market price as determined by a broker. This type of order adds a protective measure, helping the investor ensure his or her market order will not be completed at a price that is far off from the market price at the time of the order.

INVESTOPEDIA EXPLAINS 'Market-With-Protection Order'

For example, say you place a market-with-protection order to sell 1,000 shares at the current market price of $45. If half of the order is filled at this price but the price of the shares start to fall rapidly to $35, the original market order is canceled and a limit order is placed for the remaining shares at $40. If the price climbs back to $40, the rest of the shares will be sold. If there was no protection on the order, the shares may have been sold at $35, which is far off from the market price of $45 that the investor originally wanted.

RELATED TERMS
  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Market Order

    An order that an investor makes through a broker or brokerage ...
  3. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  4. Broker

    1. An individual or firm that charges a fee or commission for ...
  5. Stop Order

    An order to buy or sell a security when its price surpasses a ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop ...
Related Articles
  1. Investing Basics

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  2. Active Trading Fundamentals

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  3. Investing

    The Art Of Selling A Losing Position

    Knowing whether to sell or to hold is tough. And no rule fits all. Find out what to consider.
  4. Active Trading Fundamentals

    The Stop-Loss Order - Make Sure You Use It

    It's a simple but powerful tool to help you implement your stock-investment strategy. Find out how.
  5. Trading Systems & Software

    How do you know if a trade placed to a broker is confirmed?

    Learn how to check if trades placed with brokers online or over the telephone have been filled and confirmed. Explore different types of orders.
  6. Brokers

    How long does it take a broker to confirm a trade after it is placed?

    Learn about placing trades with a broker and the amount of time required to received confirmation of different types of orders, such as limit and stop-loss.
  7. Active Trading Fundamentals

    What's the difference between a market order and a limit order?

    Buy and sell trades with market orders at the present stock price and execute limit orders if the stock price falls within certain present limits.
  8. Trading Strategies

    Patience Is A Trader's Virtue

    Waiting may be the biggest key to reeling in that trophy investment.
  9. Investing Basics

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
  10. A trailing stop is an order to buy or sell a security if it moves in an unfavorable direction.
    Trading Strategies

    How to Use Trailing Stops

    A trailing stop is an order to buy or sell a security if it moves in an unfavorable direction.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center