Stop Order
A stop order is an instruction to a broker or other financial institution to buy or sell a security when its price reaches a certain level. It is a type of order that investors use to limit losses or protect profits. Stop orders are also known as stop-loss orders or stop-limit orders.
History of Stop Orders
Stop orders have been used by investors for decades as a way to protect their investments. They were first used in the stock market in the late 19th century, and have since become a popular tool for investors of all levels. Stop orders are especially useful for investors who are trading on margin, as they can help limit losses if the market moves against them.
Comparison of Stop Orders
| Type of Order | Description |
|---|---|
| Market Order | An order to buy or sell a security at the best available price. |
| Limit Order | An order to buy or sell a security at a specified price or better. |
| Stop Order | An order to buy or sell a security when its price reaches a certain level. |
Summary
A stop order is an instruction to a broker or other financial institution to buy or sell a security when its price reaches a certain level. It is a type of order that investors use to limit losses or protect profits. Stop orders are also known as stop-loss orders or stop-limit orders. For more information on stop orders, investors can visit websites such as Investopedia, The Balance, and the Securities and Exchange Commission.
See Also
- Market Order
- Limit Order
- Stop-Loss Order
- Stop-Limit Order
- Margin Trading
- Day Trading
- Short Selling
- Options Trading
- Futures Trading
- Swing Trading
