A stop-loss order is a buy/sell order placed to limit the losses when you fear that the prices may move against your trade. For instance, if you have bought a stock at Rs 100 and you want to limit the loss at 95, you can place an order in the system to sell the stock as soon as the stock comes to 95. Such an order is called 'Stop Loss', as you are placing it to stop a loss more than what you are ready to risk.

There are 2 types of Stop-Loss orders:

1. SL-L order (Stop-Loss Limit) = Price + Trigger Price

2. SL-M order (Stop-Loss Market) = Only Trigger Price. Note this is not available for Options as per Exchange guideline

Case 1 > if you have a buy position, then you will keep a sell SL

Case 2 > if you have a sell position, then you will keep a buy SL

Case 1 : If you have a buy position at 100 and you wish to place an SL at 95.

a. SL-M order type

You will place a Sell SL-M order with trigger price = 95.

Here, when the price is at 95, the order will get triggered and will be sold at any price in the market.

b. SL-L order type

If you have placed a Stop loss trigger at 95 and sell order at 94.90, it is then called a Stop Loss -Limit order. In this, you define the price at which the order needs to be triggered and also sold.

This is a Sell SL order with price and trigger price. Since your order needs to be triggered first, (the trigger price, preferably, should be higher than or equal to the price). 

Case 2: If you have a sell position at 100 and you wish to place an SL at 105.

a. SL-M order type

You will place a Buy SL-M order with trigger price = 105.

Here, when the price of 105 is triggered, a buy market order will be sent to the exchange and your position will be squared off at market price.

b. SL-L order type

If you have placed a Stop loss trigger at 105 and sell order at 105.10, it is then called a Stop Loss -Limit order. In this, you define the price at which the order needs to be triggered and also sold.

This is a Buy SL order order with price and trigger price. Since your order needs to be triggered first, (the trigger price, preferably, should be less than or equal to price).