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Stop loss |
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Stop lossA stop loss is a simple concept designed to limit losses on shares. The investor simply sets a rule that when a share price falls to a certain level, he will sell the shares, no matter what.The stop loss could be specified in percentage terms: e.g. when the price falls to 90% of the price you paid, then you sell. So if you bought at 100p and they fell to 89p, the stop loss is triggered.Or it could be set to track the share price. e.g. when the share price falls 10% below its highest value, you sell. So if the shares were to increase from your 100p purchase price to 125p and subsequently fall by 10% to 112.5p the stop loss would be triggered.Some of the better investor software programs now incorporate stop loss 'alerts'. You specify the level of stop loss for each share or your whole portfolio, and the program alerts you of the stop loss level is breached.Similar MatchesStop limit orderStop limit orderA stop order that designates a price limit. Unlike the stop order, which becomes a market order once the stop is reached, the stop-limit order becomes a limit order. Stop paymentStop paymentAn order given a depository institution not to pay out cash for a check; often used when the check has been stolen or lost. Stopping curve refunding rateStopping curve refunding rateA refunding rate that falls on the stopping curve. Show stopperShow stopperA legal barrier, such as a scorched-earth policy or shark repellant system, that firms use to prevent a takeover. Buy stop orderBuy stop orderA buy order not to be executed until the market price rises to the stop price. Once the security has broken through that price, the order is then treated as a market order. Also known as a suspended market order. Further SuggestionsStop order (or stop)Stop loss order Stop Transfer Stop out price Stopwords Stopped out stop order stopped out Stopping curve Gather in the stops |
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