Stop Loss Order

What is a stop order?

A stop-loss order is an instruction you give to a broker to buy or sell a security when a specific price is reached. It can limit potential losses or protect potential gains from trading, especially if you can't monitor your portfolio closely.

Where have you heard of a stop-loss order?

You may place a stop-loss order with a broker while on vacation because you can't keep a close eye on your portfolio while on vacation. If you are an individual investor, you can also place stop orders for trading on the online platform.

What you need to know about stop orders...

Once the price of the security exceeds the agreed price, I .e. the stop-loss Price, the stop-loss order immediately becomes market Price List, the broker will buy or sell the security at the current market price.

Stop orders are divided into stop-loss buy orders and stop-loss sell orders. Such as stop Loss to buy, the stop loss price is usually higher than the market price at the time. Investors use stop-loss buy orders to buy securities when the price reaches a specific level. In the case of a stop-loss sell order, the stop-loss price is usually lower than the current market price. Investors use stop-loss sell orders to sell securities when the price drops to a specific level.

A stop-loss order is a useful tool for terminating losses and safeguarding profits, especially for high-risk trades. On the other hand, a stop-loss order is not a guarantee. Due to the price slip spread, the trade may not be conducted at the exact stop loss price. In addition, stop-loss orders can be triggered by short-term fluctuations in the market price of a security, which do not represent a long-term trend.