Yes, the stop is the level where you know you want to have the system execute a market order to sell automatically. These orders tend to last for up to 60 days or so if unfilled. But ask your broker how long they’re in effect for.
Yep. wjm is exactly right.
Thanks both of you. By ‘ceiling’ I meant a limit below which the share holder doesn’t want the stock to fall. I guess ‘floor’ would have been a better choice of words.
wjm7605 - thank you. Probably best then to just spend some time watching, rather than miss the requested sell point :)
Those warnings from the brokers have to be there because the term Stop-Loss is a misnomer. It is actually a trigger that fires off a market order that is executed at the next available price. In my time as a broker I have talked to many clients who had a stop order on a stock and were filled significantly below the price they put. This is more typical with thinly traded stocks and not as likely with the stocks that Sean recommends. You may get a lower price but it typically won't be significantly lower. It could end up being higher if you are lucky.
And to clarify, its the regular stop-loss order that executes as a market order when the price is hit. Yes, there can be slippage, which means you may not get filled at that exact price. But it does guarantee a fill/exit from your position. I'm not for "stop limit orders" because while they guarantee a price, they don't guarantee a fill. So I'm not much on them.