An instruction to buy above or sell below the current market price, converting to a market order once the stop level is reached.
A buy stop is placed above current price (used for breakout entries); a sell stop is placed below (used for breakout shorts or as a stop-loss). Once the stop price is touched, the order becomes a market order and is filled at the next available price.
During fast markets or gaps, stop orders can experience significant slippage. Stop-limit orders add a limit price to control worst-case fill, at the cost of possible non-execution.