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Meaning of stoploss, trigger price, correction


Date: 17 Jan 2011   Posted By: M S KAMESWARI     Group: Finance and Investments    Category: Stock Market   

Please tell me the meaning of the following words.

Stoploss

Trigger price

Correction




Author: Mohammed Ilyas    21 Jan 2011      Member Level: Silver     Points : 4  (Rs 3)    Voting Score: 0

Hi Kameswari,

These are the terms used in the Stock Market and listed the details below.

1. Stoploss: It mean if you have purchased the stock expecting that it will increase the value but all of sudden it is decreasing for which you share value is coming down. You dont know how much it can go down so it is always better to plan how much you can afford to loose for that particular trade than put the stoploss to cut your heavy losses to limited loss.

2. Trigger Price: It mean you have a plan to buy a share when it is at 110 rs but presently stock is trading at 115 so you put a trigger price of 110 so that once the stock reaches to this price yous trading terminal will generate automatic buy signal on your given trigger price.

3.Correction: People will expect that price will touch too high and keep buying the stock but stock experts does the calcuation based on the companies various ratios to come to the correct price of the share value of particular company. After some time share value will come down to correct as per the experts views. this is called correction.

Hope it is clarified.

Regards,

Ilyas





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