How to Set a Stop Loss on Robinhood

A stop loss is an instruction to sell automatically if a stock falls to a price you choose. On Robinhood it is not on the main order screen — it sits behind a menu most people never open, which is why the feature is so often assumed to be missing.

How to place one

• 1. Open the stock’s page and tap Trade, then Sell.
• 2. Tap Order Type at the top of the ticket. This is the step people miss — the default is a market order and nothing on the screen suggests otherwise.
• 3. Choose Stop Loss Order or Stop Limit Order. The difference matters and is explained below.
• 4. Set the stop price, which is the trigger. For a stop limit, also set the limit price.
• 5. Choose the duration. Good for day expires at the close; good till cancelled stays live for a set number of days.
• 6. Review and submit. The order sits pending until triggered or cancelled, and appears under the position.

Stop loss versus stop limit

A stop loss becomes a market order when the stop price is hit. It will almost certainly fill, but at whatever price the market offers at that moment — which in a fast fall can be well below your stop.

A stop limit becomes a limit order instead. It will not fill below your limit price, which protects you from a terrible fill and creates the opposite risk: if the price gaps straight through your limit, nothing sells and you keep falling with the position.

Neither is safer. They trade one risk for the other. Background in market order vs. limit order.

Stop loss and stop limit, side by side

Say you hold a stock at 100 and set a trigger at 90.

With a stop loss, the stock drifts to 90 during a quiet session and you sell close to 90. In a panic session it slices through 90 and you sell at 84. You are out either way.

With a stop limit at a 90 trigger and an 89 limit, the quiet session fills you near 90 as before. The panic session triggers the order at 90, finds no buyer at 89 or above, and leaves it unfilled while the price continues to 84. You still hold the position, and the protection did nothing.

Which outcome is worse depends entirely on whether the fall was noise or news. Nobody knows that at the moment the order fires.

The thing beginners are not told: gap risk

A stop loss does not guarantee your exit price. It only guarantees that an order is submitted once the trigger is reached.

If a stock closes at 50 and opens the next morning at 38 on overnight news, a stop set at 45 does not sell at 45. It triggers at the open and fills near 38. This is not a malfunction — it is how stops work on every platform. It matters most around earnings, when overnight gaps are most likely.

The practical consequence: a stop is protection against a drift downward, not against a shock.

Where to set the stop price

The most common error is setting the stop at a round number a fixed percentage below the purchase price, because that is where everyone else sets theirs and because it has nothing to do with how the stock actually behaves.

A more defensible approach is to look at the stock’s ordinary daily range over the past few months and place the stop outside it. A stop inside the normal noise will be triggered by an average Tuesday. A stop well outside it only triggers on something that genuinely differs from the pattern. Reading a stock chart covers how to find that range.

The second question is what the stop is for. Protecting a profit on a position you are happy to exit is a different job from limiting a loss on one you still believe in, and the two call for very different distances.

Trailing stops

A trailing stop sets the trigger as a distance below the price rather than a fixed number. As the stock rises the stop rises with it; when the stock falls the stop stays put. It locks in gains without requiring you to move the order manually.

The tradeoff is that a trailing stop set too tight will be triggered by ordinary volatility rather than a real decline, selling you out of a position that then recovers. Set the distance against how much the stock normally moves in a day, not against how much you are willing to lose.

Alternatives worth considering first

• Position sizing. Holding an amount small enough that a 30% fall does not change your plans removes the need for a stop at all, and cannot be gapped through.
• A price alert instead of an order. Robinhood can notify you at a price without selling anything, which keeps a human in the decision. Useful when you suspect you would regret an automatic exit.
• Selling a portion. Trimming a position rather than setting a stop on all of it keeps you in the holding while reducing exposure.

Stops are a trading instrument. Applied to a long-term holding in a diversified portfolio they mostly convert temporary declines into permanent ones — the pattern examined in how to survive a market crash.

What you cannot do

• No stop orders on fractional shares. Stops require whole shares, so a part-share position cannot be protected this way.
• Stops do not run in extended hours by default, which is precisely when gaps form.
• Repeatedly triggering stops can flag you as a pattern day trader — four or more round trips in five business days in a margin account under $25,000. See Robinhood margin and the day trading statistics.

Frequently asked questions

Does Robinhood have stop loss orders?

Yes. They are not on the default order ticket. Tap Order Type on the sell screen and choose Stop Loss Order or Stop Limit Order. Trailing stops are also supported.

What is the difference between a stop loss and a stop limit on Robinhood?

A stop loss becomes a market order when triggered, so it fills at whatever price is available. A stop limit becomes a limit order and will not fill below your limit price, which protects the price but risks not selling at all.

Can I set a stop loss on fractional shares?

No. Robinhood requires whole shares for stop orders, so a fractional position cannot be protected this way.

Does a stop loss guarantee I will not lose more than that amount?

No. A stop triggers an order at your stop price but does not guarantee the fill price. If the stock gaps down overnight, the order fills near the new lower price, not at your stop.

How long does a stop order stay active on Robinhood?

You choose: good for day expires at the market close, or good till cancelled stays live for a set number of days. Pending orders are listed under the position.

Should a long-term investor use stop losses?

Generally not on core holdings. Stops convert a temporary decline into a realised loss, and broad markets recover from most declines. They are a trading tool, better suited to positions you were not planning to hold for years.