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What is Stop-Loss Order?
A stop-loss is an automatic sell order triggered when an asset drops to a specified price, limiting potential losses on a trade.
Full Explanation
A stop-loss order automatically sells your asset when it reaches a predetermined price below your entry. It's a risk management tool that limits potential losses without requiring you to watch the market 24/7. Example: Buy BTC at ₹50,00,000, set stop-loss at ₹47,50,000 (5% below). If BTC drops to ₹47,50,000, it auto-sells. Variations include trailing stop-loss (moves up with price) and stop-limit (triggers a limit order instead of market sell).
Example
If you buy Ethereum at ₹2,00,000 and set a 10% stop-loss at ₹1,80,000, your maximum loss on that trade is ₹20,000 per ETH.
Related Terms
Last updated: 2026-03-21
