What is the stop?

Time stopping is an example of instructions issued by investor for brokers. Specifically, the time stop entitles the broker to make an order to leave the position on the share when a certain amount of time has passed. Time stop usually carries certain provisions that must be met in order to make an execution order.

The idea of ​​stopping time is to allow the investor to see if the value of the investment is in the desired direction. This often means that shares or other securities cited are performing because the investor believed they would play. In the event that the investment does not meet expectations in the specified amount of time, the broker is entitled to sell shares or safety and look for other investment opportunities on behalf of the investor.

Investors use access to stop time as a means to reduce risk with the investment position. Because the main focus of investment is usually to make money, it is toimperativ that the purchased securities generate a return. Using the method stoppedInvestors can quickly interpret options that do not provide the desired level of return and look for another option that is likely to make expectations.

It is important to realize that if the provisions are not established with time stop, the broker is not entitled to make an order. As an example, the investor bought a thousand shares for $ 14.00 in the US (USD) share. A time stop is created to determine that if the value of the shares falls below $ 12.00 at any point during the first thirty days after the acquisition, the broker is immediately sold by shares. If the shares have reduced less than $ 13.00 at the ED equal time by the end of this thirty -day period.

However, the investor is not bound by the conditions of time. If the investor decides to sell shares at the time set up to the time of the stop, the Provisional Order is considered zero and invalid. The broker basically leaves the time againTákka and will follow the latest orders issued by the investor.