← Glossary · Buying and selling
Stop-loss
A sell level below your purchase price that is meant to limit a loss.
A stop-loss is a sell order that only becomes active when the price falls to a set level. It then turns into a market order and sells at the next price, so that a small loss does not become a large one.
Important: a stop does not protect against gaps. If a share opens well below your level after bad news, it sells at the first available price, lower than planned. A stop-limit order avoids that but risks not selling at all.
At your broker the stop-loss is a separate order. DipCatcher names a stop level but places nothing for you.