Interactive Investor home page [Logo]

Knowledge Base

Welcome to our knowledge base. To find what you're after, use the search box below or choose a category to view listed questions.

Search the Knowledgebase

Browse by Category

What is a Stop Loss?
User Opinions
83% thumbs up 16% thumbs down (12 votes)

How would you rate this answer?
Helpful
Not helpful
A stop loss order lets you set a price to sell shares which is lower than the current price to protect you from sharp falls in a share price.  Experienced investors would usually set a target for the profit they want to achieve and also for the loss that they're prepared to make - a stop loss lets you control the latter.  

Please note, in some circumstances a share price may fall suddenly, for example when a share goes ex-dividend. This could mean that we execute a stop loss order for you that wouldn't otherwise have been dealt. We will execute the deal in line with your original instruction which may be at a lower price than specified by your stop loss.

For example, XYZ plc shares close at 700p on Monday night. On Tuesday, the ex-dividend date, the price opens at 670p. You have set a Stop Loss at 690p so we'd execute your order at 670p.

Always monitor your active TradePlans carefully.
Visitor Comments
No visitor comments posted. Post a comment
Related Questions
No related questions were found.
Attachments
No attachments were found.