What is a Stop Loss order?

When you are holding a particular stock/F&O/commodity, you fear the losses that can happen when the price starts moving against you. If you place an order to limit such a loss it is called as a Stop Loss order. So for example, if you have bought a stock at Rs 100 and you want to limit the loss at 95, you can place an order in the system to sell the stock as soon as the stock comes to 95. Such an order is called as a Stop Loss, as you are placing it to stop a loss which could be more than what you are ready to risk.

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