Stoppordrer

Stoppordrer, or stop orders, are instructions used in securities trading that activate when the price of a security reaches a predefined stop price. In Norwegian and Danish markets, the term stoppordrer is used to denote these orders, which brokers offer to help manage risk or automate exits and entries. A basic stop order typically becomes a market order on activation, meaning it executes at the best available price, while a stop-limit order becomes a limit order at the stop price or better, potentially limiting slippage but with the risk that the order does not execute.

The main variants include a stop order to sell or buy once the stop is hit (usually as a market order), a stop-limit order (triggered at the stop price and then executed at a specified limit or better), and a trailing stop order (the stop price moves with the market price, maintaining a fixed distance or percentage). Trailing stops help lock in gains while giving room for upside movement, but they require reliable price data and timely execution.

Examples illustrate the concepts: if you own shares bought at 50 and set a stop loss at 45, the stop order aims to sell if the price falls to 45. With a stop-limit at 45 and a limit of 44.50, the order triggers at 45 but may only execute at 44.50 or better. If the price gaps down, a stop order may fill at a much lower price, while a trailing stop adjusts as the price rises.

Stoppordrer are widely used for risk management and automated exits, but they carry risks such as gap risk and slippage, especially in fast-moving or illiquid markets. They are typically available through brokers and vary in specifics across exchanges.