What is a stop order and how does it work?

A stop order is a type of order that helps the investor set the conditions of sending new orders to the market in advance.

There are two types of stop orders:

  1. A Market Order, such being Buy Stop, Sell Stop, and Stop Loss. When the levels set for the Buy Stop and Sell Stop are reached, an order for a buy or a sell is sent to the market. When the Stop Loss level is reached, an order to close the position is sent.
  2. Limit orders, such being the Stop Limit. When forming it, you set the level (Stop), upon reaching which the platform generates a Limit order and activates it at a set price.