Stop Order

A stop-loss order is a type of trading order used when you want to buy or sell a security once it reaches a specific price.

This order type helps limit an investor’s potential losses on a given stock and differs from a limit order.

When the stock price falls to the designated “stop” price, the order becomes a market order and executes at the next available price. Unlike a sell limit order, a stop-loss order will not execute at a higher price than the stop price.

To create a stop-loss order, you need to specify:

• •Number of shares you wish to sell.
• •Stop price — the price at which you no longer want to hold the position.
• •Time in Force — whether the order remains active until canceled or for one day only.