How to Set a Stop-Loss in Robinhood

If you’re a trader or investor and you wish to limit your losses, you might use a plethora of orders to enter and exit the stock market automatically. For this, you can use stop-loss and limit order strategies. However, it’s vital to know the distinctions between these numerous options and how to set them up correctly.

How to Set a Stop-Loss in Robinhood

And even when it comes just to stop-loss, there are two types of orders. Luckily, in this article, you can find all the necessary guidelines for setting up a stop-loss order efficiently.

How to Set a Stop-Loss Order in Robinhood on a PC

Stop-limit orders give you additional control over the execution of your transaction by adding a trigger. A limit order is triggered whenever the options contract reaches the stop price you designate. The limited order will be implemented if contracts are offered at or better than the price you specify in your limit order. In the event of a loss or a profit, investors might employ stop-limit orders.

There are no commissions or per-contract costs when you trade options on Robinhood. However, other platforms might charge you.

So, how can you set up that limit to trigger the stop-loss Function? Here’s how you can do it using a PC:

  1. Log into your Robinhood account.
  2. Click on the three horizontal dots on the top right corner.
  3. Navigate to the option order screen.
  4. Click on “Stop Price.”
  5. Insert the desired amount.
  6. Select “Continue” and choose between the one-day or 90 days time options. If you want to have the stop-loss option set for a couple of days, it’s best to go with the 90 days option.
  7. Enter the number of shares you want this setting to apply to.
  8. Click “Review” to check your settings.

How to Set a Stop-Loss Order in Robinhood on an iPhone

For users that like to do their trading and investing on the go, there is a convenient Robinhood app for both iOS and Android. Here’s how you can set up a stop-loss order using the iPhone app:

  1. Launch the Robinhood app on your iPhone.
  2. Scroll down to the bottom of the page, and you’ll see a list of all of your stocks.
  3. From the list, choose the stock for which you would like to set a stop-loss.
  4. The stock’s past performance and other relevant data may be found here. Tap on the “Trade” button, which may be found at the bottom right.
  5. Select the “Sell” option.
  6. At the top right of the page, select “Dollars.”
  7. The “Dollars” option will bring up a few additional choices when you tap on it. So, in the “Conditional Orders” section, tap on the “Stop Order.”
  8. Tap the Continue button to proceed.
  9. Enter your stop price (which should be lower than that stock’s market price) and then press “Continue.” You may choose “One trading day” as the time period. The second option is to have the set stop-loss on for 90 days. So, if you’re holding for a few days, go with option two.
  10. Enter the number of shares for which you wish to set this stop order and select the “Review” option.

The following page will show you the complete specifics of your order. Stop-loss orders can be sent by swiping up.

How to Set a Stop-Loss Order in Robinhood on an Android Device

For the Android users out there, the Robinhood app also allows you to set stop-loss orders. Here’s how:

  1. Open the Robinhood application.
  2. There will be a list of all your stocks at the bottom of the page.
  3. Select the stock for which you want to establish a stop-loss from the list.
  4. The stock’s historical information and other important data may be found here. Tap on the “Trade” button that is located at the bottom-right of the screen.
  5. Choose “Sell” from the drop-down menu that appears.
  6. Select “Dollars.”
  7. Tap on “Stop Order” in the “Conditional Orders” section.
  8. Press “Continue.”
  9. Enter your stop price (which should be lower than the stock’s market price) and tap on “Continue.” One trading day is a one-time option. Setting a stop-loss for 90 days is the second option. Consider option two if you plan to have this stop-loss set for a few days.
  10. Select the “Review” option after entering the number of shares for which you intend to place this stop order.

Your order’s details will be displayed on the next page. Swiping up can be used to send stop-loss orders.

Additional FAQs

Is it possible to establish a Robinhood stop-loss after business hours?

The extended-hours session will not allow stop orders to be executed. Orders placed during extended hours will be queued for the next trading day’s market open.

Is it possible to put a stop-loss in place after you’ve made a purchase?

Yes. Using a stop-loss order to restrict your loss to, say, 10% of the price at which you purchased the stock is an example of this. You can immediately place a stop-loss order of $17, for instance, after purchasing the stock. Your shares will be sold at the current market price when the stock falls below $18.

When setting stop-loss levels, how do I know what level to place them at?

When setting stop-loss levels, technical analysis may be quite helpful. In the case of a long position, for example, determining the stock’s critical support levels might be necessary for assessing the stock’s downside risk. To put it another way, it’s possible that the stock will suffer further losses if a significant support level is broken. However, be on the lookout for false outbreaks prior to entering stop-loss levels into your trading platform, conduct thorough research utilizing technical analysis and other tools.

Can I use stop-loss orders to safeguard long and short positions?

Definitely, in this context, the name “stop-loss order” is a little bit misleading. Stop-loss orders are mainly intended to guard against significant losses on both long and short positions. However, since they get triggered when the security’s price trades over a specified level, they can be utilized against large gains on current holdings as well. Even so, because stop-loss and stop-loss orders are transformed to market orders after they are broken, their actual price execution may be considerably below or above the stop-loss price.

Gain Greater Control Over Your Stocks

To provide investors and traders with more control, stop-loss orders allow them to set a price restriction for each transaction. Once a stock’s price reaches the stop price, a limit order is activated, which instructs the market maker to buy or sell it at the limit price. The option limits losses by setting the point at which the investor is unable to tolerate losses.

Although stop-loss orders can help minimize your losses, neither of these strategies is infallible. A stop-loss order may be performed at a price considerably different than the stop-loss price once the stop-loss threshold has been broken. Make sure you do your own research and understand the benefits and downsides of this type of order before placing it.

Have you ever set a stop-loss order before? Have you ever traded stocks on Robinhood? What do you like about this platform? Let us know in the comment section below!

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