Stop-loss orders are instructions to a broker to sell a security when it reaches a certain price. They are used to limit an investor's loss on a security position.
Stop-loss orders are a type of order placed with a broker or investment platform to sell a security when it reaches a certain price. This type of order is used to limit an investor’s loss on a security position. Stop-loss orders are designed to limit an investor’s risk by automatically selling a security when it reaches a certain price.
Stop-loss orders are typically used by investors who are looking to protect their investments from large losses. By setting a stop-loss order, an investor can limit their losses on a security position if the price of the security drops below a certain level. Stop-loss orders can also be used to protect profits on a security position if the price of the security rises above a certain level.
Stop-loss orders can be placed with a broker or investment platform. When placing a stop-loss order, an investor will specify the price at which they would like the security to be sold. Once the security reaches the specified price, the order will be executed and the security will be sold.
Stop-loss orders can be used in conjunction with other strategies to help manage risk. For example, an investor may use a stop-loss order in conjunction with a trailing stop-loss order. A trailing stop-loss order is similar to a stop-loss order, but it adjusts the price at which the security is sold as the price of the security moves. This allows an investor to protect their profits if the price of the security rises, while still limiting their losses if the price of the security drops.
Stop-loss orders can be a useful tool for investors looking to manage their risk. By setting a stop-loss order, an investor can limit their losses on a security position if the price of the security drops below a certain level. Stop-loss orders can also be used to protect profits on a security position if the price of the security rises above a certain level.