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Stop order

A stop order is an instruction that waits at a price and becomes a market order when price reaches it. A stop loss is a stop order that closes a losing position.

A short seller at a level usually puts a stop just above it. When price trades there, the stop turns into a market buy, whatever the price. Many stops in the same place become a pile of market orders waiting to fire, which is why a broken level can move so fast.

Learn more: what happens at a level and where stop losses cluster.