How do I place a stop-loss order?

Stop Loss orders to buy or sell a security when its price surpasses a particular price, typically to close out either a long or a short position. A client can enter two types of Stop Orders, a Market Stop Order or a Stop Limit Order. A Market Stop Order will turn the order into a market order once the trigger limit price has been touched, and the Stop Limit Order will turn into a limit order once the trigger price has been touched. Traders use stop-loss orders for risk management purposes. For instance, a trader in foreign exchange (FX) would issue an order to buy USD/ZAR at 17.8011 and a stop-loss order at 17.7996. As a result, the trader's potential loss is capped at 15 pips.

Was this article helpful?
3 out of 3 found this helpful