A stop order, also known as a stop-loss order, is an order that is not sent to the stock exchange until a certain price (= trigger) is reached. Once the trigger is reached or exceeded, a stop order becomes a market order and your order is executed at the next market price. This type of order is often used by investors to hedge against a sudden fall in prices. The trigger must therefore be lower than the current price at the time of selling.

For example:

You once bought a share at a price of 25 euros. The current price is 30 euros.

You want to protect your profits. If the price falls below 28 euros, you will want to sell your shares. You therefore set the trigger at 28 euros.

Scenario: The price drops to 27.95 euros.

The trigger activates the order, which is executed at 27.95 euros.