Stop Order
Also called: stop, stop-market, stop entry
An order that triggers a market order when price crosses a specified level — used for breakouts and stop-losses.
Definition
A stop order sleeps until price touches a trigger level, then converts to a market order. Buy stops sit above current price (breakout entry); sell stops sit below (breakout entry or protective exit).
Because the resulting order is a market order, stop orders carry slippage risk — especially around news. The trigger is guaranteed; the fill price is not.
Example
EUR/USD trades 1.0840. You believe 1.0900 is the breakout level. You place a buy stop at 1.0900. When the bid (or last price, depending on broker) touches 1.0900, a market order fires.
Formula
Trigger: Buy stop fires when ask ≥ trigger price Sell stop fires when bid ≤ trigger price
Why it matters
Stop orders can suffer significant slippage on news. If you need the fill at exactly your level (or skip), use a stop-limit instead.