At Vest, we strive to provide valuable tools for managing your investments. Many users have asked about the availability of stop-loss orders on our platform.
We are excited to announce that stop-loss orders are now officially available on Vest! This feature allows you to better manage risk by automatically selling your investments if they fall below a specified price.
What is a Stop-Loss Order?
A stop-loss order is used to limit potential losses on an investment. It is designed to automatically sell a security when its price falls to a specific level called the stop price. This protects investors from significant losses if the market moves against them.
How Does It Work?
Setting the Stop Price: Determine the price you want to sell your investment. For example, if you set a stop-loss order at $90 for a stock bought at $100, the stock will be sold automatically if its price falls to $90.
Triggering the Sale: Once the stop price is reached, the stop-loss order activates and becomes a market order, meaning it will be sold at the nearest available price.
Execution: The selling price may differ from the stop price, particularly in volatile markets. This difference is known as slippage.
Advantages of Stop-Loss Orders
Risk Management: They help manage and limit potential losses by automatically selling an asset before losses become too severe.
Emotion-Free Trading: Removes the emotional aspect of trading decisions, ensuring you stick to your strategy without panic selling.
Automated Process: Once set, the stop-loss order works automatically without continuous monitoring.
Disadvantages of Stop-Loss Orders
Potential for Slippage: In fast-moving markets, the price at which the order executes may be lower than the stop price.
False Triggers: Short-term price fluctuations can trigger a stop-loss order, leading to the sale of an asset that could recover later.
Market Conditions: Stop-loss orders may not execute at the desired price during periods of high volatility, especially if the market moves rapidly.
Next Steps
Now that stop-loss orders are live on our platform, we encourage you to explore this new feature to enhance your investment strategy. If you have any questions or need further assistance, please contact our support team.
Thank you for being part of the Vest community and for helping us continue to improve our services.