How stop loss orders work and what they do not guarantee
A standard stop loss becomes a market order once the trigger price is reached, which means the fill price can differ from the trigger price. In a fast-moving or gapping market, the executed price may be noticeably worse than the level you set; this difference is called slippage. Some brokers offer guaranteed stop losses on certain products, usually for an added cost, while standard stops carry no fill-price guarantee. Understanding this distinction is essential before treating a stop as a hard floor on losses, especially on leveraged or derivative products where gaps have amplified effects.
- A standard stop triggers a market order, so the fill price is not guaranteed.
- Price gaps at market open or around news can cause execution well past the stop level.
- Guaranteed stops, where offered, typically carry an extra charge and product restrictions.
- Stops on derivative positions interact with leverage, which magnifies the effect of slippage.


