re: Dumb question

A trailing stop may also interest you.

This is a stop order that automatically adjusts based on the peak stock price.

So in your example, if the stock is currently $100 and you set a trailing stop for $20 it will have a sell order that activates at $80.

However, if the price rises to $110, that sell target automatically adjusts to $90. $20 below the highest price after you put the order in.

Important to note, when setting a stop order you enter the target price ($80). When setting a trailing stop, you enter the amount you want it to drop before selling (so $20 for your example).

quote:

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What’s the difference in stop and stop limit ?

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To answer that question, a stop order as described will trigger a market sell order once the stock price drops to your stop price ($80). It is a market order so it will sell all of the shares you have told it to no matter what price it has to drop to in order to execute.

A stop limit will act in the same way, but the 'limit' price you set will tell it not to sell anything below that limit price (essentially the lowest price you're willing to sell for). So, if your 'stop limit' stop price is set at $80 in your example, and you set the limit price to $75, once the stock drops to $80 the order will sell as much of your stock as it can until the market price drops below $75 then it will no longer sell until it rises back above $75 (or the order is cancelled).