A stop-loss is used to specify a price at which a trader wishes to sell their stock or security. Typically, stop-losses are used to protect long positions; for example, a trader may place a stop-loss for 10% below the current price. Stop-losses do not guarantee the price at which the sell order will execute. If the price gaps past a stop-loss, it becomes a market order and is often executed at a highly unfavorable price.
