{"concept":{"id":18,"slug":"stop-order","term":"Stop order","shortDefinition":"An instruction that activates only once the price reaches a level you define, at which point it becomes a market order.","longDefinition":"A stop order stays inactive until the asset's price reaches a pre-set trigger level; at that point it activates and behaves like a market order, seeking execution at the best available price. It's commonly used to limit losses (automatically selling if the price falls below a threshold) or to protect gains already made. Unlike a limit order, it doesn't set an exact execution price -- only the condition that triggers it."},"relations":{"requirement":[],"contrast":[],"related":[{"concept":{"id":16,"slug":"market-order","term":"Market order","shortDefinition":"An instruction to buy or sell immediately at the best price currently available -- it guarantees execution, not the exact price.","longDefinition":"A market order executes almost immediately because it accepts whatever the best price in the market happens to be at that moment. It's the order type to choose when getting the trade done right away matters more than controlling the exact price. In markets with low liquidity or high volatility, the final price can differ noticeably from the last price seen before sending the order."}}],"calculatedBy":[]},"curricularPosition":[{"id":14,"moduleId":5,"slug":"what-order-types-exist","title":"What order types exist for buying or selling?","summary":"You distinguish a market order, a limit order, and a stop order, and understand what each one controls: price or certainty of execution.","bodyMarkdown":"## Objectives\n\nBy the end of this lesson you distinguish a market order, a limit order, and a stop order, and understand what each one controls: price or certainty of execution.\n\n## Content\n\nAn order is the instruction you give your broker to buy or sell an asset, specifying what you want, how much, and under what conditions. Not all orders behave the same way -- the main difference between the three basic types is what they prioritize: certainty that the trade will happen, or control over the price at which it happens.\n\nA **market order** executes immediately at the best price available at that moment. It prioritizes certainty of execution above everything else: you know the trade will happen, but you don't know exactly at what price until it has already executed. In liquid, stable markets the difference is usually minimal; in volatile or illiquid markets, it can be significant.\n\nA **limit order** does just the opposite: you set in advance the maximum price you're willing to pay (if buying) or the minimum price you'll accept (if selling), and the order only executes if the market reaches that price or a better one. It prioritizes price control over certainty -- if the market never reaches that level, the order simply doesn't execute, and it can remain pending indefinitely.\n\nA **stop order** is conditional: it stays inactive until the price reaches a trigger level you define, and at that point it activates and starts behaving like a market order. It's mainly used to limit losses -- for example, automatically selling if the price falls below a threshold you're no longer willing to tolerate -- or to protect gains already made without having to watch the price constantly.\n\n## Example\n\nIf you want to buy right now, regardless of the exact price at that instant, you'd use a market order. If you only want to buy if the price drops to a specific level you consider attractive, you'd use a limit order. If you already hold a position and want to sell it automatically if the price falls below a level you'd mark as an unacceptable loss, you'd use a stop order.\n\n## Common mistakes\n\n- Thinking a limit order always ends up executing -- it can remain pending indefinitely if the market never reaches that price.\n- Confusing a stop order with a limit order -- the stop activates at a trigger price and, once activated, behaves like a market order without guaranteeing the final price; the limit does directly set the maximum or minimum acceptable price.\n\n## Summary\n\nThe three basic order types balance certainty of execution and price control differently: the market order prioritizes certainty, the limit order prioritizes price, and the stop order activates conditionally to limit losses or protect gains.\n\n## Self-check\n\nWhat order type would you use if you want to buy right now, regardless of the exact price?\n\nWhy can a limit order end up never executing?","bodyHtml":"

Objectives

\n

By the end of this lesson you distinguish a market order, a limit order, and a stop order, and understand what each one controls: price or certainty of execution.

\n

Content

\n

An order is the instruction you give your broker to buy or sell an asset, specifying what you want, how much, and under what conditions. Not all orders behave the same way -- the main difference between the three basic types is what they prioritize: certainty that the trade will happen, or control over the price at which it happens.

\n

A market order executes immediately at the best price available at that moment. It prioritizes certainty of execution above everything else: you know the trade will happen, but you don't know exactly at what price until it has already executed. In liquid, stable markets the difference is usually minimal; in volatile or illiquid markets, it can be significant.

\n

A limit order does just the opposite: you set in advance the maximum price you're willing to pay (if buying) or the minimum price you'll accept (if selling), and the order only executes if the market reaches that price or a better one. It prioritizes price control over certainty -- if the market never reaches that level, the order simply doesn't execute, and it can remain pending indefinitely.

\n

A stop order is conditional: it stays inactive until the price reaches a trigger level you define, and at that point it activates and starts behaving like a market order. It's mainly used to limit losses -- for example, automatically selling if the price falls below a threshold you're no longer willing to tolerate -- or to protect gains already made without having to watch the price constantly.

\n

Example

\n

If you want to buy right now, regardless of the exact price at that instant, you'd use a market order. If you only want to buy if the price drops to a specific level you consider attractive, you'd use a limit order. If you already hold a position and want to sell it automatically if the price falls below a level you'd mark as an unacceptable loss, you'd use a stop order.

\n

Common mistakes

\n\n

Summary

\n

The three basic order types balance certainty of execution and price control differently: the market order prioritizes certainty, the limit order prioritizes price, and the stop order activates conditionally to limit losses or protect gains.

\n

Self-check

\n

What order type would you use if you want to buy right now, regardless of the exact price?

\n

Why can a limit order end up never executing?

","sortOrder":1,"readingMinutes":5,"difficulty":"Básico","url":"/en/academy/fundamentals/stock-orders/what-order-types-exist"}],"graphSummary":{"root":{"type":"concept","id":"18","depthFromRoot":0,"entity":{"type":"concept","slug":"orden-stop","term":"Orden stop","excerpt":"Instrucción que se activa solo cuando el precio alcanza un nivel determinado, convirtiéndose entonces en una orden de mercado."}},"depth":1,"returnedNodes":1,"truncated":false,"hasCycle":false,"nodes":[{"type":"concept","id":"18","depthFromRoot":0,"entity":{"type":"concept","slug":"orden-stop","term":"Orden stop","excerpt":"Instrucción que se activa solo cuando el precio alcanza un nivel determinado, convirtiéndose entonces en una orden de mercado."}}],"edges":[]},"relatedNews":[],"relatedEntities":[]}