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Glossary · PSX term

Stop-loss order.

A stop-loss order automatically triggers a sale once a stock falls to a set price.

Definition

It is used to limit losses or protect gains by exiting if the price drops to your stop level, after which it usually becomes a market order. In fast-moving or locked markets it may execute below the stop price or not at all.

Worked example

Setting a stop-loss at Rs. 90 on a Rs. 100 stock aims to sell if it drops to Rs. 90 to cap your loss.

Related on PSX Clarity

Term
Limit order
Term
Market order
Term
Slippage
Term
Drawdown

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