trailing stop

A type of stop order in which the stop price (trigger) moves with the trading price of a security. For example, a 10 percent trailing stop will generate a market order to exit a long position if the price of the security declines10 percent from its high. Alternatively a trailing stop can be set to trigger a market order automatically if the price moves a certain fixed amount. For example, a trailing stop can be structured to generate a market order to exit a long position if the price of the security declines by $2 from its high. See Limit Stop.