Meaning
A Stop Loss Order is a vital risk management tool in financial trading, designed to protect investors from significant losses.Definition
A Stop Loss Order is an instruction placed with a broker to buy or sell a security once it hits a specific “stop price.” Its purpose is to limit an investor’s potential loss.How It Works
If a security’s market price drops to or below the set stop price, the order automatically converts into a market order to sell.Benefits
It automates risk management, prevents emotional decisions, and protects capital by limiting downside exposure without constant monitoring.Author
