Learn Stop-Loss trading in Share & Stocks Market

Stop-loss in Stock Markets – Learn the concept of the Stop-loss trading in the stock markets and how to use it while trading using the various brokrage platforms like Angelbroking, Sharekhan etc. 

Stop-loss is a method used by an investor to limit his losses. It works as an automatic order given by the investor to his broker to sell a security as soon as it reaches a certain predetermined price.

Read – What it means – Yes Bank shares locked in for 3 years ?

For example, let’s say any investor i.e. Ridam  buys 50 shares in “StateBank: at the rate of one thousand rupees per share. Shortly, the share price falls to 960 rupees per share. Ridam wants to limit his losses; so he inputs a stop-loss order at nine hundred and fifty rupees. If price corrects further to nine hundred and fifty rupees, his broker Karvy will sell the shares to prevent further losses.

Read – Who are Blue Chip Companies ?

On the other hand, if the share price jumps to one thousand four hundred rupees per share, Ridam would want to hold on to his shares and not lose his advantage; so he inputs a stop-loss order to sell the shares if the price falls to one thousand three hundred rupees. By placing the stop-loss order, Ridam protects his investments by retaining his gains and preventing potential losses.