A stop loss order is a type of order placed with a broker to buy or sell once the stock reaches a certain price, known as the stop price. When the stop price is reached, the stop order becomes a market order. This type of order is designed to limit an investor’s loss on a position in a security. It is particularly useful during volatile market conditions to help manage potential losses without the need to monitor positions continuously.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
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