A stop order is issued to buy or sell stock when price goes above or below a particular point. This gives the Trader a greater probability of getting a predetermined entry or exit price, limits loss, or locks in his/her profits. Once the price rises above/falls below the predetermined entry/exit point, the stop order becomes a market order used by Traders in stock trading or options trading.
This is also referred to as a "stop" or "stop/loss" order.
Related terms: Protective Stop, Target, Trailing Stop, Avoid a Bull Trap, Avoid a Bear Trap