What is a Guaranteed Stop?

A guaranteed stop is a type of order used in financial trading that ensures a trade is executed at a predetermined price, regardless of market volatility. It is a type of stop-loss order that is guaranteed to be filled at the exact price specified, regardless of market conditions. This type of order is especially useful for traders who want to limit their risk and protect their capital.

History of Guaranteed Stops

The concept of a guaranteed stop has been around since the early days of financial trading. It was first developed by brokers in the late 1980s as a way to protect their clients from large losses due to market volatility. Since then, the concept has been adopted by many different types of traders, from day traders to long-term investors.

Benefits of Guaranteed Stops

The main benefit of a guaranteed stop is that it provides traders with a way to limit their risk and protect their capital. By setting a guaranteed stop, traders can ensure that their losses will be limited to a predetermined amount, regardless of market conditions. This can help traders to manage their risk more effectively and ensure that their capital is not exposed to excessive losses.

Table of Comparisons

Summary

A guaranteed stop is a type of order used in financial trading that ensures a trade is executed at a predetermined price, regardless of market volatility. It is a type of stop-loss order that is guaranteed to be filled at the exact price specified, regardless of market conditions. This type of order is especially useful for traders who want to limit their risk and protect their capital. For more information about guaranteed stops, traders can visit websites such as Investopedia, The Balance, and Investing.com.

See Also

• Stop-Loss Order
• Limit Order
• Market Order
• Take Profit Order
• Trailing Stop Order
• Stop Limit Order
• Entry Order
• Stop Out Level
• Margin Call
• Risk Management

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