A stop order is a type of trading order used in financial markets to buy or sell a security once it reaches a specified price, known as the stop price. When the market price hits this level, the stop order becomes a market order, executing at the best available price. This helps traders limit losses or protect profits. There are two main types of stop orders: stop-loss orders and stop-limit orders. A stop-loss order automatically sells a security to prevent further losses, while a stop-limit order sets a specific price at which the order will be executed after the stop price is reached.