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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Stop Loss

Definition:

A trade order that is designed, as the name suggests, to stop the bleeding. See buy stop and sell stop.

Example

Okay so you've bought a stock at 43 bucks share average cost. You were hopeful that the new drug from this company would cure cancer. Instead, it only grew hair on people's knuckles. Wisely, just in case that hair-knuckle thing happened, you had put in a stop loss order with your purchase at $43 to sell everything at $25. It’s lucky you did so because the stock closed the day at three bucks a share as it was sold to Jhirmack shampoo for a song. La la la.

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