Protective Stop

What Does Protective Stop Mean?
A strategy that aims to limit potential losses to a desired amount by using a stop-loss or stop-limit order.

Investopedia explains Protective Stop
For example, a trader or investor may execute a protective stop by setting a stop-loss order for 10% below what he or she paid for the stock, therefore limiting the loss to 10%.

Related Terms

Above the Market
Below the Market
Hard Stop
Limit Order
Market Order
Material Amount
Stop Order
Stop-Limit Order
Stop-Loss Order
More Related Terms

Related Links

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Trailing-Stop Techniques - The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
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