Stop 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
- The investor placed a stop order with her broker to sell the stock if its price fell to $20 per share.
- In a rapidly declining market, a stop order can help limit an investor's losses by automatically selling a security when it reaches a certain price.
- To minimize potential losses, the trader set a stop order to sell the stock if it dropped below $15 per share.
- A stop order can be used to buy a security once it has broken through a designated resistance level, signaling a potential uptrend.
- The day trader placed a stop order to buy the stock if its price rose to $50 per share, anticipating a breakout above that level.