A stop order is an order to buy or sell a security once the price reaches a specified level, known as the stop price, to limit an investor's loss or lock in a profit. It becomes a market order when the stop price is reached, ensuring execution but not guaranteeing the price at which the order will be filled.

Stop Order

stop order

buy or sell

Security is the practice of protecting systems, networks, and information from digital attacks, damage, or unauthorized access, ensuring confidentiality, integrity, and availability. It encompasses various strategies and technologies to mitigate risks and safeguard assets in both physical and digital environments.

security

specified level

A stop price is a predetermined price level set by an investor at which a stop order is triggered to either buy or sell a security, acting as a risk management tool to limit potential losses or lock in profits. It is crucial for investors to carefully choose their stop price level to avoid premature execution due to short-term market fluctuations.

stop price

investor's loss

lock in a profit

A market order is an instruction to buy or sell a security immediately at the best available current price. It is the most straightforward type of order and is typically used when the speed of execution is prioritized over the price of the transaction.

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