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Stop Loss

It is advisable to protect loss potential by entering an order that will "stop" the trade if the stock or option trades at a certain price. A "Stop Loss" order is such an order.

Additional Comments:

Be aware that a Stop Loss order does not protect from gaps. If a stock or option gaps past your price and opens lower, you will be taken out of the trade at the lower price.

Related Terms:

Stop Market
This type of stop loss order is known by various names, such as "stop," "stop loss," ...

Stop Order
A stop order is an order to buy or sell a stock once the price of ...

Stop Limit
This is an order that says once the stock's market price touches or goes below the ...

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