What are Stop-Loss orders?

29 May 2023


Limiting risks when investing doesn't have to be convoluted. Stop-loss orders are a great way to help investors ensure that they are setting a reasonable price for their stock to be sold and limit their losses. Essentially, a stop-loss order is an order that gets prompted when the price of the stock falls below or rises above a specified price and will be sold at the next available price.
Stop-loss orders can be a useful tool if investors are unable to monitor their trades on a daily basis.
For investors, something to consider is what parameters you will place on your stop losses once you've bought the stock. Personal risk tolerance plays an important part when it comes to placing a stop-loss order, so you should always think about what that tolerance limit is. However, another factor in setting your stop-loss order is the consideration of allowing the trade to work out. This should be taken to account when deciding on your limit either way, as you don't want to get stopped out too quickly.
Image: Tiger Trade desktop app.
Setting a stop-loss order on Tiger Trade is very simple on both the mobile and desktop app.
  1. Select the "Stop-Loss Order" setting
  2. Enter the price and quantity where you want to place your "Stop-Loss Order".
Once the stock's price reaches the trigger price set by the stop-loss order, the stocks will be traded at the prevailing market price.
In the example below, we have an order from ANZ.AU, where an order was placed at $14.80 with a stop loss of $12.25. If the price falls below $12.25, the stop-loss market order will sell the position and close the trade at the next available price.
Alternatively, if you set the stop-loss order at $12.25 below the bullish signal, your loss will be limited to $2.55, which is approximately 17%.
Image: Tiger Trade desktop app.
Think of a stop-loss as an insurance policy. You hope you never have to use it, but it's good to know you have protection should you need it.
Please note that for the mobile app, stop-loss-order is only available on the pro version of the order page.
To keep learning and developing your knowledge base, explore the additional relevant resources on Tiger Community.
Disclaimer: Trading the financial markets can carry substantial risk and may not be suitable for every investor. You should check with your financial advisor and consider whether certain financial products are right for your personal circumstances prior to making any important decisions. Past performance of financial products is no assurance of future performance. Please check our website for a full Risk Disclosure Statement.

Hero the ZERO!

ZERO transaction fees*

ZERO currency exchange fees* FOREVER!*

Join now

*Third party fees and other T&Cs apply.