A stop market order or stop-loss market order (SLM) is a scheduled order to buy or sell a stock at the market price when the price of that stock reaches the predetermined price, known as the trigger price. Stop market orders are often used by traders to limit their losses or protect their gains in the event that the market moves in the wrong direction. In other words, it helps you to limit your risk by squaring off your position in case of adverse price movements. 

Stop loss market order or SLM order gets placed on exchange only when the trigger price set by you is hit in the market. Once triggered, your order gets placed as a regular market order and is executed at the best price currently available. .

To understand more about stop loss order and understand the difference between stop loss limit and stop loss market order, click here.

To watch a quick explainer on practical applications of a stop loss order, click here