Definition and example
A stop-market order activates when its threshold is reached under the applicable rules, then seeks execution as a market order. The threshold does not guarantee the final price.
Synthetic example: a sell stop with a threshold of 95 may fill at 94.50 under the model’s conditions. Check how activation works and what follows. A stop-limit adds a price condition and can remain unfilled. Do not interchange the types or assume every platform follows identical rules.
Sources and references
Chezur examples and explanations are educational. Consult the original source to verify conditions, data and updates.
Context and review of this explanation
What happens when a stop order is triggered?
- Topics
- Orders and execution · Risk and exposure
- Level
- Beginner
- Skills
- Explain an order instruction · Define exposure and limits
- Examples
- Hypothetical situations illustrating the concept.
- Specialist review
- Not documented for this edition. Automated structure and internal-link checks do not establish specialist review.