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Definition of 'Stop-Limit Order'
An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
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Investopedia explains 'Stop-Limit Order'
The primary benefit of a stop-limit order is that the trader has precise control over when the order should be filled. The downside, as with all limit orders, is that the trade is not guaranteed to be executed if the stock/commodity does not reach the stop price.
A stop order is an order that becomes executable once a set price has been reached and is then filled at the current market price. A limit order is one that is at a certain price or better. By combining the two orders, the investor has much greater precision in executing the trade. Because a stop order is filled at the market price after the stop price has been hit, it's possible that you could get a really bad fill in fast-moving markets.
For example, let's assume that ABC Inc. is trading at $40 and an investor wants to buy the stock once it begins to show some serious upward momentum. The investor has put in a stop-limit order to buy with the stop price at $45 and the limit price at $46. If the price of ABC Inc. moves above $45 stop price, the order is activated and turns into a limit order. As long as the order can be filled under $46 (the limit price), then the trade will be filled. If the stock gaps above $46, the order will not be filled.
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Search results for 'Stop-Limit Order'
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http://www.investopedia.com/ask/answers/05/buystoplimit.asp
... You can minimize the chances of this situation happening again if you understand
these two types of orders: the buy-stop order and the buy-stop-limit order. ...
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http://www.investopedia.com/articles/trading/09/buy-stop-sell-stop-limit.asp
... If you are playing the short side of the market, a buy stop order or buy stop limit
order can be used to protect your downside if a position moves against you. ...
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http://www.investopedia.com/exam-guide/series-65/trading-securities/order-types.asp
... Stop-limit order - this order is used to ensure that a specific price is received,
but the order is only placed when a specific stop price is reached. ...
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http://www.investopedia.com/professionals/questionoftheweek/series11/111904.asp
... A) Sell limit order B) Sell stop-limit order C) Sell stop order D) Buy stop
order. Answer: The correct answer is B) Sell stop-limit order. ...
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http://www.investopedia.com/university/broker/broker4.asp
... orders. Stop Order: A market order that trades after a specified level
has been reached. This may be a stop-loss or stop-limit. ...
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http://www.investopedia.com/exam-guide/finra-series-6/securities-markets/transacting-securities.asp
... Stop-Limits:A stop-limit order is a combination of both a stop and a limit
order. The stock must reach the stop price to activate ...
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http://www.investopedia.com/university/how-to-use-ninjatrader-trading-software/ninja-trader4.asp
... To submit a stop limit order, select the BUY column for buy orders or the SELL column
for sell orders and click the middle mouse button in the cell that ...
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http://www.investopedia.com/university/simulator/advanced-trade-types.asp
... to note is that stop-loss orders carry commissions just like any order, but only ...
about stop and limit orders, try placing a few with the stop/limit prices near ...
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http://www.investopedia.com/exam-guide/series-7/securities-transactions/types-orders.asp
... A stop-limit order is similar to a stop order, but it becomes a limit order, rather
than a market order, when the security trades at the price specified on the ...
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http://www.investopedia.com/articles/trading/09/volatility-stops.asp
... orders. The initial stop and the trailing stop. The initial stop order is
placed immediately after the entry order is executed. This ...
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