What is stop-loss?
A stop-loss is a type of sell order that allows you to sell your shares in a stock at a set price (limit price) if the share price moves below a price you set (trigger price).
Stop losses are a useful risk management tool for investors as they’re able to sell their shares at a level they are comfortable with in the event of a sell-off, whilst enabling them to hold their shares if the share price rises.
Where can I find stop-loss?
When proceeding to place a sell order on a stock, enter the stock code and simply click the “stop loss” tick box. This will display the fields to enter the trigger and limit prices.
How do I use stop-loss?
- When placing a stop-loss order, first enter the “trigger” price. This is the price you would like your sell order to be placed on the market.
- Underneath the trigger price field, enter the limit price. This is minimum price you are willing to sell your shares for. This price must be at, or below the trigger price. If the stop-loss is triggered, your shares will sell between the 2 prices you have inputted.
- Proceed with the order as you would with any other sell order by entering the quantity, or value of shares you wish to sell, click next, and follow the prompts to place the order
What does the trigger and limit price mean?
- The trigger price is the maximum price you would like your sell order to be placed on the market. Your order will be placed on the market when the share price is at, or below this price.
- The limit price is the minimum price you are willing to sell your shares at. If your stop-loss order is triggered, your shares will sell at a price in-between the trigger and limit price.
How do I amend a stop-loss order?
Stop-loss orders can be amended like any other order either by clicking the pencil in the orders tab, or by clicking the order on the orders bar at the bottom of the page. Make sure you click the “tick” button to submit the changes to your order.
NOTE: You can only amend the limit price of a stop-loss order. To amend the trigger price or quantity, the order must be cancelled and re-placed.
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