Stop Order

A stop order sits dormant until price touches a trigger you set, then converts into a market order. A sell stop below the market is the classic stop-loss; a buy stop above the market is how breakout traders automate entries and how short sellers cap losses.

The conversion to a market order is the part that bites. In normal tape the fill lands near the trigger, but through a gap or a halt the order executes at the next available price, which can be far worse. A stop guarantees you exit; it does not guarantee the exit price.