what is a stop loss order 
a stop loss order is a type of order used by traders to limit their loss or lock in a profit on an existing position traders can control their exposure to risk by placing a stop loss order stop loss orders are orders with instructions to close out a position by buying or selling a security at the market when it reaches a certain price known as the stop price they are different from stop limit orders which are orders to buy or sell at a specific price once the security s price reaches a certain stop price stop limit orders may not get executed whereas a stop loss order will always be executed assuming there are buyers and sellers for the security 1for example a trader may buy a stock and place a stop loss order with a stop 10 below the stock s purchase price should the stock price drop to that 10 level the stop loss order is triggered and the stock would be sold at the best available price although most investors associate a stop loss order with a long position it can also protect a short position in such a case the position gets closed out through an offsetting purchase if the security trades at or above a specific price investopedia zoe hansen