Stop Orders Explained

by David Jenyns on December 22, 2005

Stop Orders Explained
Stop orders are not complicated. When we use the word stop, were referring to stop orders. This is an order that directs your broker to sell a position you hold long if it drops to a specified price. If you’ve sold short, you can place a stop-loss buy-to-cover order to get out of the position if it rises to a specified price. Once the stop orders have been triggered, it’s immediately executed as a market order.

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