protective stop
Definition
An action taken to reduce potential losses due to dramatic changes in the price of a stock or other security, by specifying conditions in advance that will halt trading of the security. Stop-loss or stop-limit orders can be used to implement a protective stop strategy, by halting any trades above or below pre-specified price ranges.
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Use Protective StopsLearn to use protective stops. Respect them and don't move. Hoping that a market will turn in your direction is a very delusive hope. By moving a stop loss further, a trader increases his chances to e ... Read more
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