Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Stop orders are types of order that instruct your broker to execute a trade when it reaches a particular level: one which is less favourable than the current market price. They can also be known as stop-loss orders.

Stop order definition

Stop orders are types of order that instruct your broker to execute a trade when it reaches a particular level: one which is less favourable than the current market price. They can also be known as stop-loss orders.

Stop orders differ from market orders because you are specifying the price at which a trade should be executed, instead of ordering your broker to execute a trade at the best price available when you make the order. They are the opposite of limit orders, which instruct your broker to buy or sell an asset at a particular price that is more favourable than the current market price.

There are two main reasons that traders use stop orders. Firstly, they use them to limit risk by automatically closing a position once it reaches a certain level of loss. This is called a stop closing order. Secondly, they use them to take advantage of market movements by opening a position when a market drops to a certain level. These are called stop entry orders.

Investing news

Visit our investing news section for the latest news and analysis, and where potential investment opportunities may lie.

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - Y

See all glossary trading terms