Glossary entry
A stop-loss order becomes eligible for execution when a specified trigger condition is reached. A conventional stop order becomes a market order after triggering, while a stop-limit becomes a limit order. The trigger price is therefore not necessarily the execution price, and venues or brokers may use different data to determine when a stop activates.
Illustrative example
A sell stop set at 48 may trigger when the market falls through that level. If the next available bid is 46, execution may occur there.
What to consider
Stops cannot guarantee a maximum loss. Gaps, slippage, trading restrictions, and trigger rules can produce a different result from the planned exit.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.