Etrade stop loss after hours
A stop order can be a powerful tool that when used effectively, gives traders more control over their trade objectives. Here we explain what a stop order is, how it works, why and when you might use them, and the risks of this order type. Show What is a stop order?Astop order is an order to buy or sell a stock at the market price once the stock has traded at or through a specified price (the "stop"). How does a stop order work?When a stop order is submitted, it is sent to the execution venue and placed on the order book, where it remains until the stop triggers, expires, or is canceled by the trader. Once triggered, a stop order becomes a market order, which will generally result in an execution. However, a specific execution price or price range isn't guaranteedthe resulting execution price may be above, at, or below the stop price itself. Therefore, traders should carefully consider when to employ a stop order. Why should I use stop orders?You can use a stop order as an automatic entry or exit trigger upon a certain level of price movement in a specified direction; it's often used to attempt to protect an unrealized gain or minimize a loss.
When should I use stop orders?Because stop orders result in the submission of a market order, the same execution and eligibility characteristics apply:
What are the risks of using stop orders?Stop orders submit a market order when triggered, generally guaranteeing execution unless trading is halted or closed. However, guaranteed execution comes with some tradeoffs, so understanding the risks you face is important.
Bottom lineStop orders can be a useful tool if your priority is immediate execution when the stock reaches a designated price, and youre willing to accept the risk of a trade price that is away from your stop value. However, before placing a stop order, you should understand how market hours, liquidity, and market speed can affect the execution and pricing of a stop order. What You Can Do Next
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