Stop order
A stop order is an instruction that stays dormant until a specified price condition activates it; the resulting order depends on the venue and stop type.
A broker-defined plain stop may submit a market order when triggered, exposing the fill to slippage. A stop-limit order instead submits a limit order and can remain unfilled. CME Globex also supports Stop with Protection for equity futures, which becomes a limit order with an exchange-defined protected range. Stop instructions can be used to enter or exit a position.
This page covers the mechanic; it is not trading advice.
A trigger, then an order defined by the venue
A stop order stays dormant until its trigger condition is met. On a broker-defined plain-stop example, a buy stop on EUR/USD at 1.0850 can submit a Market order when the ask reaches the trigger; a sell stop at 1.0800 can do so when the bid reaches its trigger. The eventual fill can differ from the trigger. Venue-defined stop-limit or protected-stop instructions behave differently because activation submits a limit order.
This makes a stop the opposite of a Limit order in placement. A buy limit sits below the market to enter on a pullback to a better price; a buy stop sits above the market to enter once price breaks through a level. The same instrument and the same price can be either a stop or a limit depending on the thesis: a limit expects price to come back to a level, a stop expects price to break past one.
Stop order and stop-loss are often used as if they were the same thing, but they describe different aspects of an instruction. A stop order specifies price-triggered activation and can be used to enter or exit. A Stop-loss describes the protective purpose of an exit instruction; its underlying order mechanics can be a plain stop, stop-limit, protected stop, or another broker-defined product. The exact execution and non-fill risks therefore come from the venue and order type.
Gap risk and the two jobs a stop does
A broker-defined plain stop that submits a market order carries Slippage exposure. In a simplified EUR/USD example, a sell stop triggered at 1.0820 could fill at 1.0810 if the next available bid after a gap is 1.0810. That is a ten-pip difference between trigger and fill. A stop-limit instruction avoids a worse-than-limit fill but introduces the risk that some or all of the order does not execute.
Gap risk arises when the next available tradable price is beyond a trigger. A broker-defined plain Stop-loss can therefore fill beyond its trigger, while a stop-limit can remain unfilled after price passes its limit. Some brokers separately offer paid guaranteed-stop products under their own eligibility, distance, and fee terms.
Stop-entry versus stop-loss
A stop instruction can be used for entry or protective exit. A broker-defined plain stop-entry can submit a market order after its trigger; a plain protective stop can do the same in the opposite direction. Neither use guarantees the fill price. A stop-limit controls the worst permitted fill price but can remain partially or wholly unfilled.
A stop-limit order is the variation that adds a price cap: it triggers like a stop but then places a Limit order rather than a market order, so it will not fill worse than a chosen price. The protection against slippage comes with the limit's non-fill risk — if price gaps past the limit, the order sits unfilled and the position is neither entered nor closed, which on a protective stop is the dangerous case.
Trailing stops
A trailing stop uses a trigger that adjusts as the reference price moves in the position's favour, according to the broker or venue's rules. In a 40-pip long-position example, the trigger can ratchet upward as the reference price rises and remain unchanged when it falls. What the trigger submits, how it is calculated, and whether it carries slippage or non-fill risk depend on the specified trailing-stop implementation.
Order typesHow the market, limit, stop, and stop-limit instructions compare, and when each is used.Related terms
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Common questions
What is the difference between a stop order and a stop-loss?
A stop order is activated by a specified price condition and can be used to enter or exit. A stop-loss describes the protective purpose of an exit instruction. Its mechanics may be a broker-defined plain stop, stop-limit, protected stop, or another supported order type, so the fill-price and non-fill risks depend on the venue and instruction.
Can a stop order fill at a worse price than its trigger?
A broker-defined plain stop that submits a market order can fill at a worse price than its trigger after a gap or fast move. A stop-limit order will not execute beyond its limit, but some or all of it can remain unfilled. The correct answer therefore depends on the venue, stop type, trigger rules, and available prices.
What is a stop-limit order?
A stop-limit order triggers like a stop but then places a limit order instead of a market order, with a separate limit price. It caps the fill: the order will not execute worse than the limit. The trade-off is that if price gaps past the limit, the order does not fill at all, so the position is neither opened nor closed. On a protective stop that non-fill is the dangerous case, because the position stays open while the market runs against it.
What is a trailing stop?
A trailing stop has a trigger that adjusts as the reference price moves in the position's favour, using the broker or venue's rules. In a 40-pip long-position example, the trigger can ratchet upward as the reference price rises and remain unchanged when it falls. The resulting order may carry slippage or non-fill risk depending on the specified implementation.