stop-order
Definition
- Noun:
- A financial instruction: A "stop-order" is a directive given to a broker to buy or sell a security when it reaches a specified price, known as the stop price. Once that price is triggered, the order becomes a market order.
Usage Examples
- Noun:
- He placed a stop-order to sell his shares if the price dropped to $50. (A financial instruction to sell at a specific price.)
- The investor used a stop-order to limit potential losses on the volatile stock. (A risk-management tool in trading.)
Advanced Usage
"Stop-order" vs. "limit order": A stop-order becomes a market order once the stop price is hit, while a limit order executes only at a specified price or better.
- She set a stop-order to buy the stock if it broke above $100, but she used a limit order to sell at exactly $110. (Different mechanisms for entering and exiting trades.)
"Stop-loss order": A specific type of stop-order designed to sell a security to prevent further loss.
- The trader's stop-loss order triggered when the stock fell by 10%. (A protective measure.)
Variants and Related Words
- Stop-loss (n): a stop-order used to limit losses.
- He set a stop-loss at 5% below the purchase price. (A risk-control order.)
- Stop-limit (n): a stop-order that becomes a limit order instead of a market order.
- A stop-limit order ensures the price does not go below a certain level after the stop is triggered. (A more precise but less guaranteed instruction.)
Synonyms
- Stop order: an alternative term for "stop-order".
- Stop-loss order: a specific synonym for sell-side stop-orders.
Related Idioms
- "Pull the trigger": to execute a stop-order or make a trade.
- When the price hit the stop level, he pulled the trigger and sold. (He activated the stop-order.)
- "Stop the bleeding": to use a stop-order to halt losses.
- The investor used a stop-order to stop the bleeding after the market crashed. (A metaphorical use for cutting losses.)