List of Financial Market Terms

A Protective Stop is a strategy to limit possible losses to a desired amount by using a Stop Loss or Stop Limit order. 

For example, a Trader in stock trading, options trading, or futures trading, may institute a protective stop at 5% below what they paid for a particular stock to ensure they do not lose more than 5% on that trade.

Related terms: Trailing Stop, Target, Back Stop, Stop Order

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