Stop-loss Order
A stop-loss order is a conditional trading instruction that automatically sells a security when it reaches a specified price, aiming to limit potential losses for investors.
Tumisang Bogwasi
Tumisang Bogwasi
What is a Stop-loss Order?
A stop-loss order is a pre-set instruction to an investment broker to sell a security when it reaches a certain price. The primary purpose of a stop-loss order is to limit an investor’s potential loss on a position. By defining a specific exit point, investors can protect their capital from significant downturns in the market.
These orders are commonly used by traders to manage risk and can be placed on various financial instruments, including stocks, options, and futures. They are not guaranteed to be executed at the exact stop price, especially in rapidly moving markets, where they may trigger at a less favorable price (a
