Investopedia

Continue to Site »

Stop-Loss Order

Filed Under » , ,
Dictionary Says

Definition of 'Stop-Loss Order'

An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position.

Also known as a "stop order" or "stop-market order".
Investopedia Says

Investopedia explains 'Stop-Loss Order'

Setting a stop-loss order for 10% below the price you paid for the stock will limit your loss to 10%. This strategy allows investors to determine their loss limit in advance, preventing emotional decision-making.

It's also a great idea to use a stop order before you leave for holidays or enter a situation in which you will be unable to watch your stocks for an extended period of time.

Related Video for 'Stop-Loss Order'

Articles Of Interest

  1.

    Forget The Stop, You've Got Options

    Using options instead of stop-loss orders adds finesse and control in limiting losses.

  2. The Stop Loss Order

    A stop loss order can protect an investor's portfolio when it is left unattended. Find out more about this market order and how it can work for you.

  3. Day Trading Strategies For Beginners

    From picking the right type of stock to setting stop-losses, learn how to trade wisely.

  4. Money Management Matters In Futures Trading

    Learn how this overlooked area of trading can help improve your gains.

  5. 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.

  6. The Basics Of Trading A Stock

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

  7. Risk Management Techniques For Active Traders

    Use stop-loss and take-profit points to your advantage with these strategies.

  8. What does "gather in the stops" mean?

    "Gather in the stops" is a trading strategy used by investors to trigger stop orders already in place so that the price of the stocks trade higher or lower. This strategy involves selling or ...

  9. What happens to a stop order after a stock splits?

    A stop order, commonly referred to as a stop-loss order, is an order placed with a broker to sell a security when it reaches a pre-determined price. Stop-orders are designed to limit an investor's ...

  10. 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.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center