What are Stop Loss Orders?

A stop loss order is a buy/sell order executed when the price of the security reaches a certain level set by the client. The purpose of this is to limit the loss on a particular trade. 

Let's understand this by an example: A stock is trading at ₹200 and the client's limit to bear the maximum loss is at ₹190 so a stop-loss order can be placed where (in a worst case) if the stock reaches ₹190, the sell order will be executed.

There are 2 kinds of stop-loss orders

a) SL Limit order which has Price + Trigger Price

b) SL Market order which has Price

Note: SL Market orders are blocked for all the securities(Equity segment, Equity Derivatives segment, Currency Derivatives segment and Commodity Derivatives segment) listed on BSE and for options on NSE.