Srikanth Reddy asked:
What is meant by Stop Loss in share trading ? what is the procedure to do stop loss in share trading? give me detail? It’s urgent………….
Thanks in Advance
What is meant by Stop Loss in share trading ? what is the procedure to do stop loss in share trading? give me detail? It’s urgent………….
Thanks in Advance
{ 3 comments… read them below or add one }
trading stock you can tell your broker to sell the stock when it reaches a low or a high limit. When the stock hits that price it is automatically sold. You need to set this up at the time of purchase. Or you can simply watch the stock and when it hits a limit you think is too risky simply sell it.
I’m pretty sure its a value threshold monitored by a computer and if your investment goes below it the computer sells the stock. Your stopping the loss at certain point.
Stop Loss is an order to sell if the market price (actually bid price) drops below the price you set. The stock is immediately sold at market value. You do not know how low that price may be. This is a dangerous thing to do with a stock that trades only a few thousand shares a day. If your order is activated, your stock will be placed for sale and the asking price will drop (at computer speed) until it is sold. If no one places a buy order for a few minutes, your sell price can fall to a penny a share!
A stop loss order is entered much like a buy or sell order. If you deal through a broker, tell him/her to enter that order. If you deal with an online brokerage, you will do it much like your normal order process. The details will vary by company, but all should have some kind of ‘help’ screen to explain it.