Stop-loss

A stop-loss is an automatic instruction you set to sell a stock if its price drops to a certain level, protecting you from bigger losses. You'll see this tool in your brokerage account when you're placing a trade—it's basically a safety net. If the stock tanks, your position automatically sells at your predetermined price, so you're not left holding a bag that keeps getting heavier. For example, you buy shares of TechCorp at $50 and set a stop-loss at $45. If the price falls to $45, your shares sell automatically, capping your loss at $5 per share instead of potentially losing much more if you wait and hope it bounces back.