TeachMeFinance.com - explain Stop-loss order
Stop-loss order -- See Stop order.
Stop order. When an order is given to a broker for the
purchase of a stock, for instance, at 100, with instructions to
stup it at 98 it means that the stock is to be sold if it declines
to 98. On the other hand, if a stock is sold short at 100
with instructions to stop it at 102 it is to be bought back if
it advances to 102. A stop order is employed principally to
limit loss in speculation ; in such a case it is specifically designated
as a stop-loss order.
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