Setting a Stop Loss Order on Robinhood
A stop loss order is an instruction to sell a stock automatically if its price drops to a level you choose. On Robinhood, you set this up when you place a sell order, not as a separate step afterward. You pick the stock, choose "Sell," set your stop price, and confirm — then Robinhood watches the price and executes the sale if it hits that level.
Stop loss orders do not may provide you will sell at exactly your stop price. If the stock drops fast, it may sell below that price. Robinhood will execute the order at the best available price once the stock reaches or falls below your stop level, which could be lower than you set.
Key Takeaways
- Stop loss orders on Robinhood are placed through the sell order screen by selecting "Stop Loss" as the order type.
- You must own the stock before you can place a stop loss order on it.
- The order triggers when the stock price falls to or below your chosen stop price, but may execute at a worse price if the stock drops quickly.
- Stop loss orders remain active until the stock price hits your stop level, you cancel them, or the market closes for the day if you set them as day orders.
How to Place a Stop Loss Order Step by Step
Open Robinhood and tap the stock you own. Tap the sell icon (usually a downward arrow or "Sell" button). The app will show you order type options at the bottom of the screen. Tap "Stop Loss" instead of the default "Market" or "Limit" order.
Enter the stop price — the price at which you want the sale to trigger. This is the level where Robinhood will begin trying to sell your shares. Below that field, you will see the number of shares you are selling. Confirm the order type is set to "Market" (the default for stop loss orders) unless you want to add a limit price as well. Then tap "Review Order" and confirm.
Once you confirm, the order is live. Robinhood will monitor the stock price during market hours. If the price touches or falls below your stop price, the order converts to a market sell order and executes at the next available price.
Stop Loss vs. Stop Limit Orders
A stop loss order becomes a market order once triggered, meaning it sells at whatever price the market offers. A stop limit order adds a second condition: a limit price below your stop price. The order only sells if the price is at or above that limit.
Stop limit orders give you more control over the sale price but carry a risk: if the stock drops past your limit price, the order will not execute at all, and you will still own the shares. Stop loss orders may provide the sale will happen once triggered, but the actual price may be lower than you expected. Choose stop loss if you want to exit no matter what; choose stop limit if you want to avoid selling below a certain price.
What Happens When Your Stop Price Is Hit
When the stock price reaches or falls below your stop price during market hours, Robinhood converts your stop loss order into a market sell order. This happens automatically — you do not have to do anything. The shares then sell at the best available price at that moment.
If the stock gaps down (drops sharply between trades), your sale may execute well below your stop price. This is the main risk of stop loss orders. The order guarantees the sale will happen, not the price. If you want to avoid selling below a certain level, use a stop limit order instead, though that carries the risk of not selling at all.
Time Frames and Order Expiration
By default, stop loss orders on Robinhood are day orders, meaning they expire at the end of the trading day if not triggered. If the stock does not hit your stop price by market close, the order cancels automatically and you still own the shares.
Robinhood does not currently offer good-till-canceled (GTC) stop loss orders that persist across multiple days. If you want the order to remain active the next day, you will need to place it again. Check your order history or the stock detail page to see whether your stop loss order is still active or has expired.
Canceling a Stop Loss Order
To cancel a stop loss order before it triggers, open the stock page and look for your open orders section. Tap the order you want to cancel, then tap "Cancel Order" and confirm. The order will be removed when ready, and your shares will remain in your account.
You can cancel at any time during market hours. Once the order has triggered and converted to a market sell order, you cannot cancel it — the sale will execute. If you want to prevent a sale, you must cancel the stop loss order before the stock price reaches your stop level.
Common Mistakes When Setting Stop Loss Orders
Setting your stop price too close to the current stock price is the most common mistake. If the stock normally moves up and down by a few dollars a day, a stop price just below the current price will trigger on normal fluctuations, selling your shares when you did not intend to. Give yourself a buffer based on how volatile the stock is.
Forgetting that stop loss orders are day orders is another frequent error. You place an order, the stock does not hit your stop price that day, and the order expires. You think you are protected but you are not. If you want ongoing protection, you will need to place the order again the next day.
Using stop loss orders on very volatile or low-volume stocks can also backfire. If a stock trades infrequently or swings wildly, your order may execute far below your stop price because there are few buyers at the level you chose. Test your understanding of the stock's trading patterns before relying on a stop loss order.
Frequently Asked Questions
Can I set a stop loss order on a stock I do not own yet?
No. You must own the stock before you can place a stop loss order on it. Stop loss orders are for selling shares you already have. If you want to set up a sale in advance, you need to buy the stock first, then place the stop loss order.
What is the difference between a stop loss order and a trailing stop?
A stop loss order uses a fixed price you set once. A trailing stop adjusts automatically as the stock price rises, staying a set distance below the highest price the stock reaches. Robinhood does not currently offer trailing stops, only fixed stop loss and stop limit orders.
Will my stop loss order execute after market hours?
No. Robinhood only monitors stop loss orders during regular market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays). If the stock price drops below your stop level after hours, the order will not trigger. Day orders expire at market close, so you would need to place a new order the next day.
Can I place a stop loss order on fractional shares?
Yes. If you own fractional shares of a stock on Robinhood, you can place a stop loss order on them just as you would for whole shares. The order will sell your fractional shares at the market price once your stop level is reached.
What happens if the stock gaps down below my stop price overnight?
Your stop loss order will not trigger because the order is only active during market hours. When the market opens the next day, the stock will already be below your stop price, but the order from the previous day will have expired. You would need to place a new stop loss order if you still want to sell.