An order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a security position.
Also known as a "stop order" or "stop-market order".
In other words, setting a stop-loss order for 10% below the price you paid for the stock would limit your loss to 10%.
It's also a great idea to use a stop order before you leave for holidays or enter a situation in which you will be unable to watch your stocks for an extended period of time.
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