A stop-loss order is a type of investment strategy used to limit potential losses on a security. When an investor sets a stop-loss order, they specify a price at which the security will automatically be sold if it falls to that level. This helps protect against significant losses in a declining market. For example, if an investor buys shares of a company at $50 and sets a stop-loss order at $45, the shares will be sold automatically if the price drops to $45. This strategy is commonly used by traders to manage risk and maintain control over their investments.