BSE Discontinues Stop Loss Orders

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BSE to end stop loss orders across various market segments from Oct 9 to prevent erroneous order placement and protect investors

Impact on Traders

Traders will lose the ability to use stop loss orders, a valuable tool for limiting losses by automating sale at a predetermined price

Reason for Discontinuation

Decision made after a significant price swing in a Sensex call option due to a stop loss market order without proper price protection

Exchange Advisory

BSE had earlier issued a caution to trading members, advising them to exercise caution while placing orders and use protective features

Stop Loss Functionality

Stop loss orders enable automatic selling of securities if prices drop to a specified level, providing investors a crucial risk management tool

Investor Loss Mitigation

Stop loss is crucial for investors to mitigate potential losses by selling their holdings if values are expected to fall below a set threshold