A stop-loss order is a type of order placed with a broker to sell a security (e.g., stocks, bonds, or commodities) when it reaches a certain price. This order is used by investors to limit their losses on a security position.

For example, let's say an investor bought a stock at $50 per share and doesn't want to lose more than 10% of their investment. They can set a stop-loss order at $45 per share, which will trigger an automatic sell order if the stock falls to or below $45 per share. This ensures that the investor will not lose more than 10% of their investment in case the stock price drops sharply.

It's important to note that a stop-loss order does not guarantee that the investor will get the exact price they set as the stop-loss price. If the price drops quickly and there are no buyers willing to buy at that price, the actual price at which the stock is sold may be lower than the stop-loss price. Additionally, stop-loss orders do not protect against losses from gaps in the market, where the price of a security may drop or rise sharply due to news or events outside of regular trading hours.