5 smart things to know about stop-loss order in stock market investing
1. A stop-loss order is a type of order used to limit losses on any trade due to adverse price movement.2. In a Stop-loss order with a trigger of 10% below the stock’s purchase price, the order is triggered when the stock falls 10% and is sold in the market.
3. Stop-loss orders help to cut losses and insure against a big loss in the stock market.
4. Such an order is automated, which helps save the time and effort required to track stock prices.
5. Stop-loss can be triggered by short-term fluctuations or a free fall in the market, resulting in losses.
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
