What is stop-loss?

The dollar amount of claims filed for eligible expenses at which point you’ve paid 100 percent of your out-of-pocket and the insurance begins to pay at 100 percent. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.

What is a stop loss and why do you need one?

The main purpose of a stop loss is to ensure that losses won’t grow too BIG. While this might sound obvious, there is a little more to this than you might assume. Imagine two traders, Kylie and Kendall. They both trade the same exact trading strategy with the only difference being their stop loss size.

What are the benefits of a stop-loss order?

Key Takeaways 1 Most investors can benefit from implementing a stop-loss order. 2 A stop-loss is designed to limit an investor's loss on a security position that makes an unfavorable move. 3 One key advantage of using a stop-loss order is you don't need to monitor your holdings daily. More items...

What is the difference between a stop-loss and a limit order?

A stop-loss order becomes a market order to be executed at the best available price if the price of a security reaches the stop price. A stop-limit order also triggers at the stop price. However, the limit order might not be executed because it is an order to execute at a specific (limit) price.