How to Do a Stop Loss on Fidelity
In the world of investing, managing risk is crucial for long-term success. One effective way to mitigate risk is by using a stop loss order. A stop loss is an instruction to sell a security when it reaches a certain price, thereby limiting potential losses. If you are a Fidelity investor, you might be wondering how to set up a stop loss on your account. This article will guide you through the process step by step.
Step 1: Log in to Your Fidelity Account
The first step to setting up a stop loss on Fidelity is to log in to your account. Go to the Fidelity website and enter your username and password. If you have forgotten your login credentials, you can reset them by following the instructions provided on the website.
Step 2: Navigate to the Trading Section
Once you are logged in, navigate to the trading section of your account. This can usually be found in the main menu or by clicking on the “Trade” tab at the top of the page. In the trading section, you will find various options for managing your investments, including placing stop loss orders.
Step 3: Select the Security
To set up a stop loss, you need to select the security you want to protect. Click on the “Trade” button and then choose “Stop Loss” from the dropdown menu. This will open a new window where you can enter the details of your stop loss order.
Step 4: Enter the Stop Price
The next step is to enter the stop price. This is the price at which you want your security to be sold. You can either enter a specific price or choose a percentage of the current market price. For example, if you want to sell a stock when it falls by 10% from its current price, you would enter a stop price that is 10% lower than the current market price.
Step 5: Choose the Stop Type
Fidelity offers two types of stop orders: market stop and limit stop. A market stop order will sell the security as soon as the stop price is reached, while a limit stop order will only sell the security at the specified limit price. Choose the type of stop order that best suits your investment strategy.
Step 6: Review and Confirm
Before placing your stop loss order, review all the details to ensure they are correct. Double-check the stop price, stop type, and any other relevant information. Once you are confident that everything is accurate, click the “Place Order” button to submit your stop loss order.
Step 7: Monitor Your Stop Loss
After setting up your stop loss, it’s important to monitor it regularly. Keep an eye on the market and be prepared to adjust your stop loss if necessary. Remember that stop loss orders are not guaranteed to be executed at the exact stop price, as the market may move rapidly.
In conclusion, setting up a stop loss on Fidelity is a straightforward process that can help you manage risk in your investment portfolio. By following these steps, you can protect your investments and potentially avoid significant losses. Always remember to review and adjust your stop loss orders as needed to align with your investment goals and market conditions.
