Orders & trading
What is Stop-loss order?
Also called: Stop loss, SL order, SL-M
Hinglish mein padhein: Stop-loss order kya hota hai?
A stop-loss order automatically exits a position when the price reaches a trigger level, to cap the loss on a trade.
An SL (stop-limit) order becomes a limit order once triggered; an SL-M (stop-market) becomes a market order. SL-M exits more reliably but at an uncertain price.
A stop is not guaranteed: if a stock gaps below your trigger at the open, the exit will happen at a worse price.
Example
You buy at ₹200 and place a stop-loss at ₹190. If the price falls to ₹190, the order triggers and sells to limit your loss to roughly ₹10 a share plus charges.
Related terms
- Limit orderA limit order sets the worst price you will accept: a buy limit fills at that price or lower, a sell limit at that price or higher.
- Position sizingPosition sizing decides how many shares to buy so that, if your stop-loss hits, you lose only a planned slice of your capital.
- Risk-reward ratioThe risk-reward ratio compares how much you could lose (entry to stop-loss) with how much you aim to gain (entry to target).
- Gap up and gap downA gap up is when a stock opens above the previous day's high (or close); a gap down opens below. Gaps usually follow overnight news.