Stop Price

A stop price acts simply as a tripwire. When the market trades at or through this price, your broker is instructed to release an order into the market.

• Sell Stop (Stop-Loss): Set below the current market price. If the stock falls to your stop price, the order activates to sell your shares, helping protect profits or cap losses on a downward move.
• Buy Stop: Set above the current market price. If the stock rallies to your stop price, the order activates to buy shares, often used to catch a breakout or cover a short position.
  
  

Note: Reaching a stop price does not guarantee your execution price—it only guarantees that your order is triggered. Depending on market speed and liquidity, the actual fill price may be slightly higher or lower than the stop price itself.