What is stop loss in stock market?

In the stock market, a stop loss is an order that an investor places with a broker to sell a security when it reaches a certain price. The stop loss price is a predetermined price that is set by the investor, and it is typically lower than the current market price of the security. The purpose of a stop loss order is to limit an investor's potential losses on a security by selling it when it falls to a certain price.

For example, if an investor buys a stock at $100 per share and sets a stop loss at $90 per share, it means that if the stock falls to $90 or below, the stop loss order will be triggered and the stock will be sold. This can help to protect the investor from larger losses if the stock continues to decline in value.

Stop loss orders can be used as a risk management tool to help investors manage their portfolios, but it's important to note that they do not guarantee a specific price and may not be executed at the desired price due to market conditions. It's also worth noting that stop loss orders may not be suitable for all investors and may not be appropriate for all types of securities.