A stop order, also referred to as a stop-loss order, is an order to buy or sell an asset once the price of the asset reaches a specified price, known as the stop price. When the stop price is reached, a stop order becomes a market order. A buy stop order is entered at a stop price above the current market price.
Stop orders can be used to manage markets moving against you. An example would be if you buy some Bitcoin at €10,000. You want to limit your loss in case the price will fall down. A stop order can be placed to sell Bitcoin at €9,950. If the price of Bitcoin reaches €9,950, the Bitcoin will automatically be sold at market price. It is possible to combine limit and stop orders, to automatically place a limit order when the stop price is reached.
In CoinMetro's margin platform, you can set a stop price for your positions, which will automatically close your positions at market price, if the latest traded price reaches the stop price.
CoinMetro’s Demo Platform is always available if you would like to practice without risk. Please note that this article is not to be seen as trading or financial advice. It is for educational purposes only.
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