A stop-loss order is a request to buy or sell a stock (or ETF, options, etc), but only if that stock reaches a specified price level. It is commonly used as an offsetting order placed to exit your existing buy or sell position once the stock hits the defined trigger price. It helps you to limit your risk by squaring off your position in case of adverse price movements or book profits. 

Stop-loss orders enable traders to make pre-determined decision to get out of a trade, which helps them avoid letting their emotions influence their decisions.

There are two types of stop loss orders:

1. Stop loss limit order or SL order: As soon as the stock price crosses the trigger price set by you, your stop order converts into a limit order and is placed in the exchange at the limit price set by you. 
2. Stop loss market order or SLM order: As soon as the stock price crosses the trigger price set by you, your stop order converts into a market order and is executed at the best price currently available.

When you select stop-loss order option under Advanced option on Arihant Plus app, it will display an additional Trigger Price field, that you need to fill in. This is also known as the stop price. 

Tip: You can either set a ₹ limit or a % limit.

To understand more about SL and SL-M differences, click here.

To watch a quick explainer on practical applications of a stop loss order and how to place it on Arihant Plus, click here.