The cost at which a buy or sell order gets activated for execution at the exchange (NSE or BSE) is known as the trigger price. Simply put, once the price of your stock reaches the trigger price decided by you, then the order is directed to the exchange servers. Your shares will be sold at the limit price after the stop loss order has been triggered.
The stop loss price is also known as the stop loss limit price and stop loss trigger is just called the trigger price.
Let’s take an example.
Suppose a stock is trading at Rs. 95, and you put a stop loss buy order with a trigger price of Rs. 100, and a limit price of Rs. 102. If the stock price hits Rs. 100, your order will get activated. In other words, it will get triggered and a limit order of Rs. 102 will be sent to the exchange. The stock will be purchased at either Rs. 102 or lower than that, given that there are sellers willing to buy it that price.
A stop loss order can be described as a passive order, and to activate it we need a trigger price. This trigger price acts as a price limit and only after surpassing this price the stop loss orders changes into an active order.
Make a note that a stop loss order is usable for a trading day. If the stop loss order fails to trigger during the trading day, it will automatically expire at end of trading day.