stop order


Definition of stop order

: an order to a broker to buy or sell respectively at the market when the price of a security advances or declines to a designated level

Examples of stop order in a Sentence

Recent Examples on the Web Shaw said in a statement to WXYZ MSP noticed issues with the devices, DataMasters, statewide and issued a stop order on the contract. Meredith Spelbring, Detroit Free Press, "Michigan State Police discover flaw in Breathalyzer tests, suspend contract with vendor," 13 Jan. 2020 The South Dakota Department of Agriculture has put a stop order on the sale of the material. USA TODAY, "Lego impeachment, emotional support coyote, mumbo sauce: News from around our 50 states," 21 Dec. 2019 Garrison said his distributor in the United Kingdom has stopped ordering from his distillery altogether because of the ongoing tariffs. Nicole Goodkind, Fortune, "Whiskey Distillers Brace for 400% Tax Hike as Lawmakers Struggle to Get Anything Done," 17 Dec. 2019 However, suppose another (supplier), perhaps in another country, fails to prepare, your part of the value chain still grinds to a halt, and your customer still stops ordering. Washington Post, "Brexit escalation raises alarm for ailing European economy," 29 Aug. 2019 Oberlin stopped ordering food from the bakery after the 2016 protests, but resumed business with Gibson’s in January 2017, according to the Chronicle-Telegram. Mary Kilpatrick, cleveland, "Oberlin College appeals $31 million Gibson bakery decision," 8 Oct. 2019 For two months, the college stopped ordering daily baked goods from the bakery. Emily Bamforth,, "Oberlin College president claims Gibson’s Bakery case could have ‘profound, chilling’ effect on free speech," 24 June 2019 Oberlin stopped ordering from the bakery after the 2016 protests, but resumed business with Gibson’s in January 2017, according to the Chronicle-Telegram. Emily Bamforth,, "Gibson’s Bakery awarded more than $33 million in damages from Oberlin College; total awarded exceeds $40 million," 13 June 2019 The stop order continued through two following inspections. Washington Post, "Riders plunge 34 feet, 6 injured in roller coaster derail," 15 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'stop order.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of stop order

1882, in the meaning defined above

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Time Traveler for stop order

Time Traveler

The first known use of stop order was in 1882

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Statistics for stop order

Last Updated

18 Jan 2020

Cite this Entry

“Stop order.” The Dictionary, Merriam-Webster Inc., Accessed 26 January 2020.

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More Definitions for stop order

stop order


Financial Definition of stop order

What It Is

A stop order (also called a stop-loss order or stop market order) is a trade order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price.

How It Works

For example, let's assume that you own 100 shares of Company XYZ stock, for which you have paid $10 per share. You are expecting the stock to hit $12 sometime in the next month, but you do not want to take a huge loss if the market turns the other way.

You direct your broker to set a stop order at $8.50. If the stock goes up, you will realize all of the benefits. If the stock goes down and touches $8.50, your broker will automatically place a market order to sell your shares.

It is important to note that when the stop order is triggered, it becomes a market order. You will not necessarily receive $8.50 per share; you will most likely receive a little more or a little less.

Why It Matters

Stop orders generally are a trading or short-term investing strategy. They are useful because they help reduce the pressure of monitoring your trade day-to-day; the trade is largely set on autopilot. This can be particularly helpful for emotional investors.

Even though stop orders offer crucial trading discipline to investors by helping them make important decisions about cutting losses, they also increase the risk of getting out of a position too early -- especially when volatile stocks are involved. In our example, if XYZ was known to be volatile and fluctuated from $8.00 to $12.50 during the one-month forecasting period, then you would miss out on the price appreciation that you expected.

Long-term buy-and-hold investors probably don’t want to make substantial use of stop orders. When a stock goes lower, stop orders will lock in losses rather than give you a chance to evaluate whether a slight price decline is actually signaling a buying opportunity.

Source: Investing Answers

stop order

Legal Definition of stop order

see order sense 4b

More from Merriam-Webster on stop order

Rhyming Dictionary: Words that rhyme with stop order Encyclopedia article about stop order

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to express in a more acceptable way

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