Does a stop loss work outside of market hours? (2024)

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Does a stop loss work outside of market hours? (2024)

FAQs

Does a stop loss work outside of market hours? ›

A classic stop loss (=if triggered sell immediately for any price) doesn't work outside of market hours (4AM to 9:30AM and 4:00PM to 8:00PM) because it triggers market order and only limit orders are permitted outside of market hours due to wide bid/ask spreads. Example.

Do stop-loss orders work after hours? ›

Stop orders will only trigger during the standard market session, 9:30 a.m. to 4 p.m. ET. Stop orders will not execute during extended-hours sessions, such as pre-market or after-hours sessions, or take effect when the stock is not trading (e.g., during stock halts or on weekends or market holidays).

Do stop losses work all the time? ›

Stop loss orders aren't always appropriate

But keep in mind that, sometimes, stop loss orders can be problematic. For example, in highly volatile markets, stop loss orders aren't always advisable. This is because prices can rise and fall dramatically in a short time.

Does stop loss work after hours in Robinhood? ›

Stop orders won't execute during extended or overnight hours. The stop limit and stop loss orders you place during extended or overnight hours will queue for the opening of regular market hours on the next trading day. Trailing stop orders won't execute during extended or overnight hours.

Does stop loss work after hours webull? ›

Tips: On Webull, we only support placing trailing stop orders during market hours. On Webull, a trailing stop order expires at the end of each trading day. If your order is not filled, you need to place the order again on the following trading day.

Do stop losses work when the market is closed? ›

A short answer is no (below I explain why). But there are ways around it (below I explain how).

What are the disadvantages of a stop-loss order? ›

Disadvantages. The main disadvantage of using stop loss is that it can get activated by short-term fluctuations in stock price. Remember the key point that while choosing a stop loss is that it should allow the stock to fluctuate day-to-day while preventing the downside risk as much as possible.

What is the golden rule for stop loss? ›

The golden rule of Stop Losses is that they should never be moved away from the market once the trade is opened. If a trader feels that their stop loss is incorrectly placed, they are recognising that the foundations of their trade are incorrect and therefore they should close out.

What is the 7% stop loss rule? ›

To make money in stocks, you must protect the money you already have. That brings us to the cardinal rule of selling. Always sell a stock it if falls 7%-8% below what you paid for it. This basic principle helps you always cap your potential downside.

When stop loss doesn't work? ›

In case of extremely less volume, where there are not enough buyers and sellers (referred to as an illiquid contract), the Stop Loss will not be executed as the stock may not have enough buyers/sellers at a defined stop-loss limit price by you for the order to be executed which is also known as 'Market depth'.

Should day traders use stop-loss? ›

Key Takeaways. Most investors can benefit from implementing a stop-loss order. A stop-loss is designed to limit an investor's loss on a security position that makes an unfavorable move. One key advantage of using a stop-loss order is you don't need to monitor your holdings daily.

Can traders see stop loss orders? ›

Market Makers Can See Your Stop-Loss Orders

So market makers move the stock to the stop-loss levels and take them out. Especially during low volume trading in the middle of the day.

Can I have a stop-loss and a take profit at the same time? ›

Most traders use take-profit orders in conjunction with stop-loss orders (S/L) to manage their open positions.

Do big traders use stop loss? ›

One of the main reasons professional traders don't use hard stop losses is because they use mental stops instead. The advantage of this is that you don't have to 'give away' where your stop loss is by placing it in the market.

Do stop-loss orders always work? ›

While stop-loss orders can be useful, it's important to realize they don't always work as intended.

Is it OK to trade without stop loss? ›

Yes, it's possible to trade without using a stop loss, but it is risky. Stop losses help protect against significant losses by automatically selling a position when it reaches a certain price.

Do limit orders trigger after-hours? ›

Unlike market orders, which can only be executed during the standard market session, limit orders can be entered for execution during pre-market, standard, and after-hours trading sessions.

What happens if the market opens below my stop-loss? ›

When an investor places a stop-loss order, they are essentially setting a safety net for their investment. If the market price of the stock drops to or below the pre-determined stop price, the stop-loss order is triggered, and the stock is automatically sold at the best available market price.

Do stop-loss orders always get filled? ›

If the stock reaches the stop price, the order becomes a live market order and is typically filled at the next available market price. If the stock fails to reach the stop price, the order isn't executed.

Can a stop-loss order fail? ›

When the price drops or rises very fast, a market stop loss might execute at worse prices, and the limit stop loss might not execute at all. Check the next section to find out more about limit stop losses. Market orders are there to buy or sell something as fast as possible at the best available price right now.

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