Soft Stop Order

  

Categories: Trading

A stop order involves telling your broker to make a transaction. You say, "If shares of AAPL get to $195, sell all my shares."

A soft stop order is more informal. It's not a hard, specific number. Also known as a mental stop, it's more of a signpost. Like, "You know, if Apple gets to $195, I should really consider selling."

So, when shares reach that level, the transaction doesn't happen automatically. You can make a decision based on events. Re-evaluation. "You know...I can probably wait to see if it gets to $200 and make the decision then."

Related or Semi-related Video

Finance: What are Limit Order, Sell Limi...7 Views

00:00

Finance a la shmoop what is a limit order? you want to sell a thousand shares

00:07

of Colonel electric it was demoted after they cut their dividend the shares have [Scissors cuts dividend in half]

00:13

been trading wildly between $15 and $25 a share you don't want to feel like a

00:19

moron for having sold them at fifteen bucks when six weeks later they kissed

00:24

25 with tongue so what do you do well you put in a limit order that is you put

00:30

a limit of a minimum price of 25 bucks a share for Colonel Electric such that [Pile of stocks appear]

00:36

those shares will simply sit in your account unsold maybe forever until

00:41

somebody out in the wild blue yonder of Stockland is willing to pay twenty five [Woman standing at a colonel electric stand]

00:47

dollars or more for the shares where you have a minimum price limit of 25 bucks a

00:52

share in your order so here's to hoping they sell and don't get further demoted [Man carries stock into car]

00:57

Sargent Electric is just a place you don't want to go

Up Next

Finance: What is an All or None Order?
71 Views

What is an All or None Limit Order? An all or none limit order says the investor wants their order filled entirely or not at all. An investor may r...

Find other enlightening terms in Shmoop Finance Genius Bar(f)