This starting point is critical because it is essential at this point for those who will deliver the technology, those who will use that technology, and those who have a stake in the project to reach agreement on its concept and definition. The process is represented in the figure below.
DEFINITION of 'Stop-Loss Order'. An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investorâs loss on a position in a security. Although most investors associate a stop-loss order only with a long position, it can also be used for a short position, in which case the security would be bought if it trades above a defined price.
A stop limit order to sell becomes a limit order, and a stop loss order to sell becomes a market order, when the stock is bid (National Best Bid quotation) at or lower than the specified stop price.