How it works
Traders use stop entries to participate after a price moves through a level and stop exits to reduce exposure after an adverse move. Once triggered, many stop orders behave like market orders.
What to check
Check which price triggers the order, such as bid or ask, and whether the platform offers stop-limit or guaranteed-stop variants. Trigger rules matter around spreads and gaps.
- Know the trigger price
- Know what the order becomes after triggering
- Plan for gaps
Limits and risks
A normal stop price is not necessarily the final execution price. Fast moves can trigger the order and fill it at a worse available level.
Primary sources
BIS 2025 Triennial Central Bank Survey↗FCA: Contracts for difference (CFDs)↗General information only. Investment products can lose value, and terms, fees and regulation can change.