What is a Stop Order?
A Stop Order is an order to buy or sell a stock once the price reaches a specified price, known as the stop price. When the Stop Price is reached, a Stop Order becomes a Market Order and is executed at the best available price (which can be lower or higher than the Stop Price).
Keep in mind, Stop orders aren't guaranteed to execute until the price of the stock reaches the set stop price.
How do Sell Stop orders work?
For a Sell Stop Order, you can set a stop price which is below the current price of the stock. If the stock falls to your stop price, your sell stop order will become a sell market order. The execution price of the order may be lower or higher than the Stop price.
Stock X is currently trading at $5 per share, but you want to sell the stock as soon as the stock price goes below $4 per share. This may be because you suspect that the price might fall further and you want to stop holding the share when it reaches $4. You would set your stop price to $4.
If stock price of X falls from $5 to $4, your sell stop order will become a sell market order and your order will be executed at the best price available. If stock price of X doesn’t reach $4, your order won't be triggered.
How can I set a Stop Order?
You can set a stop order on the Revolut app. On the order screen, please click on market order dropdown on the top right corner. You can select the type as Stop order and enter the stop price value.
On the Revolut app, currently you can only execute Stop orders with one day expiry. At the moment, we do not offer Stop orders with longer expiry periods.
Introduction to stock trading
- What is a stock?
- Where do stocks come from?
- What is stock ownership?
- Why do people buy stocks?
- How could you lose money from buying stocks?
- What are stock markets?
- What is a stock broker?
- What is a stock price?
- What is a bid-offer spread?
- What are stock charts?
- What is commission?
- What are bullish vs bearish markets?
- What is technical analysis?
- What is fundamental analysis?
- What are analyst recommendations?
- What are stock financials?
- What is EPS (earnings per share)?
- What is a P/E ratio (Price-to-Earnings)?
- What is a P/CF ratio (Price-to-Cashflow)?
- What is ROE (Return on Equity)?
- What is Market Sentiment?
- What are Market Sentiment Indicators?
- What is the VIX?
- How does News and Social Media impact stocks?