Microstructure · Core
Stop-Loss Order
A stop-loss becomes a market (or stop-limit) order once a trigger trades — a planned exit that can become a gap-out.
Definition
A sell stop sits below the market. When the trigger prints, it becomes a market order (or a limit if stop-limit). Gaps, halts, and thin books mean the fill can be far from the stop. Stops are public-ish when clustered.
Why it matters
Retail risk control and forced de-risking both live here. Clustered stops are a map of where the next air pocket is.
Case
FX stops pile under a round number. A probe print triggers the cluster, the market order cascade runs, and the number is the liquidity, not the thesis.
How to read it
A stop is a trigger, not a guaranteed price. In gaps, only a stop-limit (which may not fill) or an option hedge is a price.
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