STOP ORDERS

An order which becomes a market order once a certain price level is reached. These orders are often placed with the purpose of limiting losses. They also are used to initiate positions. Buy stop orders are placed at a price above the current market price. Sell stop orders are placed below the market price; for example, if the market price for December corn is 320›, a buy stop order could be placed at 320› or higher, and a sell stop could be placed at 319_› or lower. A buy stop order is activated by a bid or trade at or above the stop price. A sell stop is triggered by a trade or offer at or below the stop price.