.svg)
.svg)
.svg)
.svg){kind=icon}
.svg)
.svg){kind=icon}
.svg)
.svg){kind=icon}
.svg)
.svg){kind=icon}
.svg){kind=icon}
.svg){kind=icon}
A stop-loss is an automatic sell order that you set to limit your loss. You determine in advance at which share price you want to sell if the price falls. Once that level is reached, the sale is executed automatically.
A stop-loss helps investors manage risk without constantly monitoring the market.
When you buy a share, you can never be certain how the price will develop. By setting a stop-loss, you define in advance how much loss you are willing to accept. If the price falls below your chosen level, the share is sold at the next available price.
This prevents a small loss from turning into a much larger one. It is important to understand that the final selling price may differ slightly from the set level, especially during rapid price movements.
Short example:
Suppose you buy a share for €50. You want to risk no more than €5 loss per share and set a stop-loss at €45.
If the price falls to €45, your share is automatically sold around that level. Your loss amounts to approximately €5 per share.
If the price continues to rise to, for example, €60, nothing happens and you keep the share as long as the stop-loss is not triggered.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult a professional advisor when making financial decisions. The information and tips provided on this website are based on the personal insights and experience of our analysts and are intended for educational purposes only.
