Both are types of "stop orders" that remain dormant until their trigger price is hit, at which point they become standard market orders to be executed at the next available price. Buy Stop Orders
A is an instruction to buy a security once it reaches a price above the current market level, while a sell stop order is an instruction to sell once the price drops below the current market level. buy stop vs sell stop
: Limiting losses on a short position. If you bet a stock will fall but it starts rising instead, a buy stop automatically buys the shares back to "stop" your losses. Sell Stop Orders Both are types of "stop orders" that remain
: Entering a trade once a stock breaks above a resistance level, betting that the upward momentum will continue. If you bet a stock will fall but