Stop order | Robinhood

Stop order

A stop order is an order to buy or sell a stock once the stock reaches a specific price, also known as the stop price.

When the stock reaches your stop price, the stop order becomes a market order and is executed at the best price currently available during market hours only.

Stop orders are used to trigger a purchase if the stock price reaches or goes above the stop price. They’re also used to trigger a sell if the stock price reaches or drops below the stop price.

Stop order details

It's important to keep the following in mind when placing a stop order:

  • The stop price does not guarantee execution price. A stop order becomes a market order when the stop price is triggered, and Robinhood is required to execute a market order fully and promptly at the current market price. Therefore, the price at which a stop order ultimately is executed may be very different from the stop price, especially during times of increased market volatility.

  • Stop orders may be triggered by a short-lived swing in price. During periods of volatile market conditions, the price of a security can move significantly in a short period of time and trigger the execution of a stop order (and the security may later resume trading at its prior price level). If your stop order is triggered under these circumstances, it may sell at an undesirable price even though the price of the security may stabilize during the same trading day.

  • Sell stop orders may exacerbate price declines during times of extreme volatility. The activation of sell stop orders may add downward price pressure on a security. If triggered during a precipitous price decline, a sell stop order also is more likely to result in an execution well below the stop price.

  • Placing a limit price on a stop order may help manage some of the risks. A stop order with a limit price (a stop limit order) becomes a limit order when the stock reaches the stop price. A limit order is an order to buy or sell a security for an amount no worse than a specific price (or the limit price). By using a stop limit order instead of a regular stop order, you will receive additional certainty with respect to the price you receive for the stock. However, investors also should be aware that, because brokers cannot sell for a price that is lower (or buy for a price that is higher) than the limit price selected, there is the possibility that the order will not be executed at all. You are encouraged to use limit orders to prioritize achieving a specific target price over an immediate execution irrespective of price.

Keep in mind

Stop orders created incorrectly or at a price that can’t be executed may be rejected.

Buy stop order

With a buy stop order, you can set a stop price above the current price of the stock. If the stock rises to your stop price, your buy stop order becomes a buy market order.

Example

YOWL is currently trading at $6 per share. You want to wait to purchase YOWL until it reaches $8 because you think it’ll rise much higher, but only after it reaches $8, so you set your stop price to $8.

  • If YOWL rises to $8 or higher, your buy stop order becomes a buy market order. Then YOWL is purchased at the best price currently available.
  • If YOWL stays below $8, a market order isn’t triggered, and no shares are purchased.
Sell stop order

With a sell stop order, you can set a stop price below the current price of the stock. If the stock falls to your stop price, your sell stop order becomes a sell market order.

Example

You purchased YOWL for $10 a few months ago. It’s currently trading at $20 per share ($10 unrealized profit). Your goal is to make at least $5 per share if the price were to drop. So you create a sell stop order at $16.50. If YOWL reverses itself and starts to drop below the stop price of $16.50 it becomes a sell market order.

  • If YOWL falls to $16.50 or lower, your sell stop order becomes a sell market order. Then YOWL is sold at the best price currently available.
  • If YOWL stays above $16.50, a market order isn’t triggered, and you keep your shares.
Over-reserving buying power

To protect your account against overspending, we’ll over-reserve your buying power for stop buy orders and trailing stop buy orders.

  • For Good-For-Day orders that you enter during market hours, we’ll reserve an additional 5% of buying power.
  • For other orders, we’ll reserve an additional 10% of buying power.

Keep in mind, these percentages might change in response to extreme volatility.

Disclosures

The examples included in this article are for illustrative purposes only. In general, understanding order types can help you manage risk and execution speed. However, you can never eliminate market and investment risks entirely. It’s usually best to choose an order type based on your investment goals and objectives.

All investments involve risks, including the loss of principal. Investors should consider their investment objectives and risks carefully before investing.

Robinhood U.K. Ltd (Robinhood UK) is a company registered in England and Wales (09908051) and is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

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All investing involves risk and a loss of principal is possible.

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services, securities lending, and margin investing to eligible UK customers with margin accounts. In relation to margin investing, Robinhood U.K. is acting as credit broker and not a lender. Margin is provided by Robinhood Securities, LLC. Robinhood U.K. can only introduce you to Robinhood Securities, LLC for margin investing. Margin investing, stock lending and options trading are optional products and subject to Robinhood's eligibility and appropriateness criteria.

Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Review Robinhood UK’s Fee Schedule to learn more.

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All investing involves risk and a loss of principal is possible.

Robinhood U.K. Ltd (Robinhood UK) is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services, securities lending, and margin investing to eligible UK customers with margin accounts. In relation to margin investing, Robinhood U.K. is acting as credit broker and not a lender. Margin is provided by Robinhood Securities, LLC. Robinhood U.K. can only introduce you to Robinhood Securities, LLC for margin investing. Margin investing, stock lending and options trading are optional products and subject to Robinhood's eligibility and appropriateness criteria.

Robinhood Securities, LLC is regulated in the U.S. by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.

Robinhood U.K. Ltd is a private limited company registered in England and Wales (09908051).

Robinhood does not provide investment advice. Individual investors should make their own decisions.

Commission-free trading of stocks refers to $0 commissions for Robinhood self-directed individual brokerage accounts that trade U.S. listed securities and ADRs. Keep in mind, other costs such as regulatory fees may apply to your brokerage account. Review Robinhood UK’s Fee Schedule to learn more.

UK Privacy policy

Robinhood, 70 Saint Mary Axe (Suite 404), London, England, EC3A 8BE. © 2025 Robinhood. All rights reserved.