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What is a stop-loss order in trading?
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A stop-loss order is an order placed with a broker to sell a security when it reaches a certain price, limiting the trader’s potential losses.
A stop-loss order is a risk management tool used by investors to limit potential losses on a security position. It involves setting a predetermined price level at which a security will be automatically sold to prevent further losses if the market moves against the investor’s position. This order helps mitigate downside risk and protect investment capital in volatile market conditions.
A stop-loss order is a crucial tool used by traders and investors to limit potential losses on a securities position. It operates as an instruction to sell a security when it reaches a specific price point, known as the stop price.