Nov 17 (Reuters) - Investors will not be able to make "stop orders" and "good till cancelled orders" on the New York Stock Exchange and NYSE MKT from Feb. 26, the exchange said, as it looks to reduce risks during choppy trading.
A "good till cancelled order" is valid until an investor cancels it or the trade is executed, while a "stop order" allows an investor to buy or sell a stock when it exceeds a particular price.
On Aug. 24, people had standing "stop orders" that they thought would protect them, but the shares crashed through the "stop orders" and investors were automatically sold out of positions at prices well below where their "stop order" stood.
All existing "good till cancelled orders" and "stop orders" residing on the NYSE book will be canceled, NYSE said on Monday. (bit.ly/1j6vYIc)
"We expect our elimination of stop orders will help raise awareness around the potential risks during volatile trading," NYSE spokeswoman said. (Reporting by Subrat Patnaik in Bengaluru and Trevor Hunnicutt in New York; Editing by Sriraj Kalluvila)