Stop-Loss Order Definition

A stop-loss order is an instruction to close a position automatically once the price reaches a specified level, limiting potential losses.

What is a Stop-Loss Order?

Stop-loss orders are a core risk management tool used to define the maximum acceptable loss on a trade.

Once triggered, the order is typically executed as a market order at the next available price.

Setting a stop-loss at $45 on a position bought at $50 limits the maximum loss if the price falls.

Scalping is a short-term trading strategy that aims to profit from very small price movements, often within seconds or minutes.

A sector is a group of companies operating in the same segment of the economy, such as technology, energy, or healthcare.

Securities are tradable financial instruments representing ownership, a creditor relationship, or rights to ownership, such as stocks and bonds.