Investments & Financial Planning

A Stop Order is an order to buy or sell a security as soon as the security's price hits a specific price level. Buy stop orders are placed above the market and sell stop orders are placed below it. The order becomes a market order if and when a transaction takes place at or through the stated stop price. A Buy Stop Order is an order that becomes a market order to buy if and when someone trades a round lot at or above the stop price. A Sell Stop Order is an order that becomes a market order to sell if and when someone trades a round lot at or below the stop price.