Stop Loss orders are designed to limit your loss if a share that you hold falls in price. As soon as the price of a share reaches your Stop price this triggers a Market order to be sent to the place of execution. Dependent on the place of execution, this order type is offered by the exchange or simulated in the IT systems of DEGIRO. In the latter case, this is on a best-effort basis.
Once your Stop Loss is reached, and a market order is triggered, this market order will be executed even if the price of the stock in question subsequently rises above your Stop Loss.
Likewise, when you have a short position, you can place a Stop Loss order to limit your losses if the share price rises. The Stop price becomes the price at which you will start buying back your short position.
In most situations, the last price is used as a trigger, but it can also be that the bid price and ask prices can be used when there is no last price. To avoid bad executions at unfavourable prices, for some product segments the stop loss will not be released when market maker quotes are not in the market or not visible. On the Products& Markets page, you can find what products this may apply to.
A Stop Limit order is a Stop Loss order that, instead of a Market order, generates a Limit order when your chosen 'stop loss' price is reached. In the case of a sell order, your Stop Limit should be below your Stop Loss. In the event that the trading price of the product falls below your Stop Limit, a sell order will not be executed. With this type of order, the buy or sell transaction will not be executed for a worse price than your chosen limit.
Please refer to the Orders and Order Execution Policy document in our Document Centre for more information.
You can learn more about order types in our Investor Academy.