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.
For instance, if you own stock ABC, which currently trades at $20, and you place a stop order to sell it at $15, your order will only be filled once stock ABC drops below $15. Also known as a stop-loss order, this allows you to limit your losses.However, this type of order can also be used to guarantee profits.nce the stock reaches $10 or less, you will automatically buy a predetermined amount of shares. On the other hand, if you own stock ABC and it is trading at $12, you could place a limit order to sell it at $15.