Stop-Loss Order

What Does Stop-Loss Order Mean?
An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position.

Also known as a "stop order" or "stop-market order".

Investopedia explains Stop-Loss Order
Setting a stop-loss order for 10% below the price you paid for the stock will limit your loss to 10%. This strategy allows investors to determine their loss limit in advance, preventing emotional decision-making.

It's also a great idea to use a stop order before you leave for holidays or enter a situation in which you will be unable to watch your stocks for an extended period of time.

Filed Under: Brokers, Stocks

Related Terms

Bracketed Buy Order
Buy-Stop Order
Hard Stop
Protective Stop
Stop Hunting
Stop Order
Stop-Limit Order
Stopped Out
Weak Longs
Weak Shorts
More Related Terms

Related Links

The Stop-Loss Order - Make Sure You Use It - It's a simple but powerful tool to help you implement your stock-investment strategy. Find out how.
Risk Management Techniques For Active Traders - Use stop-loss and take-profit points to your advantage with these strategies.
Forget The Stop, You've Got Options - Using options instead of stop-loss orders adds finesse and control in limiting losses.
The Basics Of Order Entry - Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
The Art Of Selling A Losing Position - Knowing whether to sell or to hold is tough. And no rule fits all. Find out what to consider.
Trailing-Stop Techniques - The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
Limiting Losses - It is impossible to avoid them completely, but there is a systematic method you can use to control them.
Day Trading Strategies For Beginners - From picking the right type of stock to setting stop-losses, learn how to trade wisely.
Protect Yourself From Market Loss - There are several simple strategies you can use to protect yourself from downside risk.
What does "gather in the stops" mean? -
Money Management Matters In Futures Trading - Learn how this overlooked area of trading can help improve your gains.
What happens to a stop order after a stock splits? -
Can a stop-loss order be used to protect a short sale transaction?
How does a stop-loss order work?

Rate this Term: Your Rating: Overall Rating: Vote Now!