Short answer

The trigger price is the point at which your buy or sell order becomes active for execution on the exchange servers. Once the exchange triggers your stop-loss order, the limit price becomes the price at which you will sell or buy shares.

The stop-loss (SL) order consists of two price components:

The stop-loss price is also referred to as the stop-loss limit price.

The stop-loss trigger price is referred to as the trigger price.

Example scenario

You place an SL (Stop Loss - Limit) order for ITC.

Once the stock price reaches ₹206, your order becomes active, triggering a limit order at ₹208 sent to the exchange.

You will purchase the stock at either ₹208 or a lower price if sellers are available at that point.

A stop-loss order is a passive order. The trigger price acts as a threshold, and your stop-loss order becomes active only when the market price crosses this threshold, whether it is above or below the stop-loss price.

A stop-loss order is only valid for a trading day. If the exchange does not trigger your stop-loss order during that day, it will automatically expire at the end of the trading session. To have an order that remains active across multiple trading sessions (up to 1 year) until the trigger condition is met, you can place a Good Till Triggered (GTT) order.