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Glossary Term: STOP ORDER

Definition(s) for STOP ORDER:


1. ) refers to an order to buy or sell a security when a definite price is reached, either above (on a buy) or below (on a sell) the price that prevailed when the order was given.This type of trade provides more investment control than a market order, which will buy or sell the security at any price. A stop order to buy, always at a higher price than the current market price, is usually designed to protect a profit or limit a loss on a short-sale. A stop order to sell, always at a lower price than the current market price, is usually designed to protect a profit or limit a loss on a security already purchased at a higher price.

2. ) The price at which the futures contract underlying a call or put optioncan be purchased (if a call) or sold (if a put).

3. ) An order to buy or sell at the market price triggered once a security has traded at a stop price set by the customer. In the Hybrid Market, stop market order processing is automated.

4. ) An order, placed away from the current market, that becomes a market order if the security trades at the price specified on the stop order. Buy stop orders are placed above the market while sell stop orders are placed below.

5. ) A type of contingency order, often erroneously known as a 'stop-loss' order, placed with a broker that becomes a market order when the stock trades, or is bid or offered, at or through a specified price. See also Stop-limit order



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