Stop-Loss Order

A stop-loss order is an exit instruction intended to reduce further loss by activating when a position reaches a chosen adverse price condition.

After activation, the instruction may become a market or limit order depending on the selected type. A stop-market order favors getting out but can slip, while a stop-limit order controls price but may not execute. Stops support disciplined risk management, yet gaps, outages, trigger rules, and insufficient liquidity mean they cannot guarantee a maximum loss under unexpected or stressed market conditions.

The stop level is a trigger, not a guaranteed execution price or insurance against account loss.