Sell Stop
A stop order placed below the current price that triggers a market sell when price falls to the stop level — the standard stop-loss mechanism for long positions.
A sell stop is a pending sell order that activates when the asset trades at or below the stop price. For a long position it acts as a stop-loss; for a short position it can be used to enter a breakdown.
Like all stop orders it converts to a market order on trigger, so the fill could be below the stop price in a fast market or after a gap open.
Example
Long XYZ at $50.00. Sell stop placed at $47.50. If XYZ prints $47.50, the position is liquidated at the best available bid.
Related Terms
Buy Stop
A stop order placed above the current price that triggers a market buy when price rises to the stop level — used to enter breakouts.
BeginnerSell Limit
A limit order to sell at or above a specified price — placed above the current market to exit on strength or short into resistance.
BeginnerStop Order
An order that becomes a market order once the asset trades at or through a specified stop price.
BeginnerStop-Limit Order
A two-stage order: a stop price triggers the order, then a limit price caps the worst acceptable fill.
IntermediateStop-Loss Order
A stop order placed to exit a position at a loss before it grows larger. The primary tool for managing downside risk.
Beginner