4.14What is a stop-loss market (SL-M) order?
1What is it?
An SL-M order becomes a market order once the trigger is hit, so it sells at the best available price.
2Why does it exist?
It almost guarantees an exit, which matters most in a fast-falling market.
3Diagram
| SL-Limit | SL-M | |
|---|---|---|
| After trigger becomes | Limit order | Market order |
| Fill guaranteed? | No | Almost |
| Price guaranteed? | Yes (limit or better) | No (slippage) |
4Risks
- May fill well below the trigger in a crash or gap.
- Some brokers and exchanges restrict SL-M in certain segments.
5Quick revision
- SL-M = trigger → market order.
- Prioritises exit over price.
- Slippage possible.
6Knowledge check
Q1. Which order gives a near-certain exit: SL-L or SL-M?Show answer
SL-M.
Q2. Which order controls the exit price?Show answer
SL-Limit.
Q3. What is the risk of SL-M?Show answer
Slippage below the trigger.