Business and Personal Finance Dictionary

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• STOP ORDER
  
  You can issue a stop order to your broker to buy or sell a security once it trades at a certain price, usually called the stop price. Stop orders are entered below the current price if you are selling and above the current price if you are buying. For example, if you owned a stock currently trading at $35 a share that you feared might drop in price, you could issue a stop order to sell if the price dropped to $30 a share. Once the stop price is reached, your order becomes a market order. If the price dropped very quickly, and other orders had been placed before yours, the stock could actually end up selling for less than $30. You can give a stop order as a day order or as a good-till- canceled (GTC) order.
  
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