Stop-loss Order (Noun)
Meaning
An order to a broker to sell (buy) when the price of a security falls (rises) to a designated level.
Classification
Nouns denoting communicative processes and contents.
Examples
- A stop-loss order is an instruction to a broker to sell a security when it falls to a certain price, limiting potential losses.
- Investors often use stop-loss orders to automatically sell a stock if it falls below a certain price, reducing their potential losses.
- To limit potential losses, the investor placed a stop-loss order with her broker to sell the stock if it fell below $50 per share.
- The trader set a stop-loss order at $75, so if the stock price fell to that level, the broker would automatically sell the shares.
- By placing a stop-loss order, the investor ensured that her losses would be capped if the stock's value suddenly dropped.