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Stop

• Is an order than becomes market executable when a stated level is hit or crossed. Sell stops become market activated when the market declines to the stated stop price or lower. Then the order requires the instrument to be sold at prevailing market prices. Buy stops become market activated when the market advances to the stated stop price or higher. Then this order requires the instrument to be purchased at the prevailing market prices. A variation of the Limit Order is the Stop Limit Order.

 
 Embedded terms in definition
 Buy
Hit
Limit order
Limit
Market prices
Market
Order
Prices
Sell
Stop limit order
Stop limit
 
 Referenced Terms
 Buy stop order: An order to buy a security that is entered at a price above the current offering price and that is triggered when the market price touches or goes through the buy Stop price.

 Complex order: Is an order which has multiple requirements. It can contain contingencies, Stops, stop limits, time instructions and other elements.

 Do not reduce: Is an instruction on an order that notifies the broker or specialist that the client does not want the price to be adjusted for cash dividends.Abbreviated DNR. Used on a Buy or Sell Order to tell the broker not to decrease the limit price on buy-limit and sell-Stop orders on the record date of a cash dividend. See also: Buy Stop Orders.

 Interest only strip: Abbreviated IO. A security based solely on the interest payments form a pool of mortgages, Treasury bonds, or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments Stop and the value of the IO falls to zero.

 Order: Is a set of instructions with the intent of executing a transaction. The following is a list of order types. See: All or None (AON) or All or Nothing, Buy on Close, Buy on Opening, Contingent, Discretionary, Non-Discretionary, Do Not Reduce (DNR) , Exchange for Physicals (EFP) , Fill or Kill (FOK) , Good Till Canceled (GTC) , Immediate or Cancel (IOC) , Limit (LMT) , Market, Market if Touched (MIT), Market on Close (MOC) , Market on Opening, Not Held, One Cancels the Other (OCO), Open Order, Sell on Close, Sell on Opening, Stop (STP), Stop Limit (STP LMT), and various combinations as with spreads, options, and other instruments.

 
 Related Terms
 Buy stop order
Stop limit
Stop limit order
Stop loss order
Stop order
Stop out price

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