Example 1
Let's assume you have a holding of ABC plc shares that were originally bought for 50p per share. The current selling price is 55p per share. You do not want to sell the shares now as you believe they may rise further. If, however, the share price falls you do not want to sustain a loss on your original investment. You therefore decide to place a Stop order to sell at 50p. If the share price falls to or below 50p before your Stop order to sell expires then your shares will be sold at the market price.

Example 2
Your recent purchase of LMN plc shares, bought at 378p per share, is not showing any profit (or loss) at the present time. You are prepared to keep hold of them, in the hope that they will rise, but would prefer to switch your investment into another company if LMN shares start to show signs of becoming a loss. You have decided that 18p per share is your acceptable level of loss. You place a Stop order to sell at 362p and include an optional limit price of 360p. Your maximum loss is now guaranteed to be no greater than 18p per share since your shares will be sold at a price between 360p and 362p inclusive, after the share price has fallen to or below 362p providing this happens before your order expires.

Example 3
Your holding of XYZ plc shares were originally bought for 100p per share. The current selling price is 120p per share. You do not want to sell the shares now but are going on holiday and are therefore unable to keep track of the share price over the next few weeks. In case the share price falls whilst you are away you decide to place a Stop order to sell to protect you from losing all of the profit made thus far. You set your stop price at 115p, include an optional limit price of 110p and leave your order good for 20 business days. If the share price falls to or below 115p before your order expires then your shares will be sold at a minimum price of 110p per share and you will have retained at least 10% of the profit made to date.