A stop-loss order occurs when you want to buy or sell a security when the asset reaches a specific price.
These order types limit investor loss on a security and differ from limit orders.
When a certain stock price falls to the designated “stop” price, the order becomes a market order, and it executes at the next available price. Unlike sell limit orders, stop orders will not be executed if the price is higher.
To create a stop order, you need to specify:
Number of shares you want to sell
Stop price: price at which you do not wish to keep the position
Time in Force: whether the order will be pending until canceled or for one day only