Financial Times FT.com

Stop-losses: Insurance for those scared of losing

By Alice Ross

Published: June 11 2010 00:36 | Last updated: June 11 2010 00:36

Investors spooked by the volatility plaguing global stock markets are being urged to take out stop-losses to ensure the swings do not cause too much damage to their trading accounts.

Stop-losses are used by traders to protect themselves from losing too much money if markets quickly move against their open trades and they have no time to close their positions. Trading firms can agree to stop positions automatically if an asset hits a certain level.

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