UK Accounting Glossary
An investor is stopped out of a position when a position is liquidated due to a stop order or a stop-limit order. A stop or stop-limit order eliminates emotions of fear or greed when an order is automatically stopped out at a predetermined price. An investor may be stopped out of a position with a pre-determined profit or the investor may be stopped out of a position with a planned and acceptable loss. In the case of a long position, an investor is stopped out through the sale of a stock. In the case of a short position, the investor is stopped out through the purchase of off-setting shares. For those investors who correctly employ stop and stop-limit orders, being stopped out of a position can be an important part of an overall strategy.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Stopped Out are sourced/syndicated and enhanced from:
This glossary post was last updated: 6th February 2020.