Definition of 'Stopped Order'
A market order on the NYSE that is stopped from being executed by the specialist because of a request from a member firm to obtain a better price than that available. According to NYSE rules, once the order is stopped, it must be identified and the specialist must guarantee the market price at the time of the stop should they be unsuccessful in obtaining a better price.
Investopedia explains 'Stopped Order'
This is a procedure on the NYSE in which the specialist is actively involved in the market as an agent representing a member firm.
An example would be when a member firm is trying to buy company ABC at $10. If the current asking price is $10.25 and the specialist has agreed to stop the market order for the member firm, the order will be stopped and the specialist will post a bid for $10.00. Should the order not be filled for the member firm at the $10, and the market continues to advance, the specialist will be obliged to fill the order at the $10.25.
There are many different ways an order can be stopped under the guidelines of the NYSE. These orders should not be mistaken with limit orders or stop orders placed by investors.