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A stop price is the price in a stop order that triggers the creation of a market order. In the case of a Sell on Stop order, a market sell order is triggered when the market price reaches or falls below the stop price. For Buy on Stop orders, a market buy order is triggered when the market price of the stock rises to or above the stop price.
In December 2007, journalists Carrick Mollenkamp and Serena Ng wrote of a CDO called Norma created by Merrill Lynch at the behest of Illinois hedge fund, Magnetar. It was a tailor-made bet on subprime mortgages that went "too far." Janet Tavakoli, a Chicago consultant who specializes in CDOs, said Norma "is a tangled hairball of risk."
When the stop price is reached, a stop order becomes a market order. A buy-stop order is entered at a stop price above the current market price. Investors generally use a buy-stop order to limit a loss, or to protect a profit, on a stock that they have sold short. A sell-stop order is entered at a stop price below the current market price.
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Three of the five either went bankrupt (Lehman Brothers) or were sold at fire-sale prices to other banks (Bear Stearns and Merrill Lynch) during 2008, creating instability in the global financial system. The remaining two converted to commercial bank models in order to qualify for Troubled Asset Relief Program funds (Goldman Sachs and Morgan ...
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Stop-loss may refer to: Stop-loss insurance, an insurance policy that goes into effect after a set amount is paid in claims; Stop-loss order, stock or commodity market order to close a position if/when losses reach a threshold; Stop-loss policy, US military requirement for soldiers to remain in service beyond their normal discharge date
Rating agencies lowered the credit ratings on $1.9 trillion in mortgage backed securities from the third fiscal quarter (1 July—30 September) of 2007 to the second quarter (1 April–30 June) of 2008. One institution, Merrill Lynch, sold more than $30 billion of collateralized debt obligations for 22 cents on the dollar in late July 2008.