A stop order whose trigger rises automatically with the price
A trailing stop raises the trigger price of a stop order automatically as the share price climbs, and never lowers it when the price falls. A sell order goes out once the price drops a set distance from its high, keeping part of the gain while closing the position once the price turns. If the price gaps sharply, the order can fill at a worse price than the trigger. Whether it is offered, and exactly how it works, differs by broker.
Bought at $1,000 with a $100 trail, a rise to $1,300 lifts the sell trigger to $1,200.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.