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    Stop Order

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    Can you please help me to understand what it means by once a stop order became effective, it then became a market order?

    © BrainMass Inc. brainmass.com November 30, 2021, 3:21 am ad1c9bdddf

    Solution Preview

    A stop order is a type of market order, actually. It is an order to buy or sell a certain security once a specified price (the stop price) is reached or passed. So, once the stop price is reached, the order then buys or sells at the next available price. Here is an example:

    "A sell stop order is an instruction to sell at the best available price ...

    Solution Summary

    The solution provides a response to how stop orders work.