What is a stop-limit order?

A stop-limit order is similar to a basic stop order, but with one added condition. With a stop limit, the investor not only specifies a stop price, but also a stop limit price. If the security in question reaches the stop price, this will trigger a limit order (instead of a market order for a regular stop order).

How does a stop order work?

A stop order is always executed in the direction that the price is moving. For instance, if the market is moving lower, the stop order is set to sell at a pre-set price below the current market price. Alternatively, if the price is moving higher, the stop order will be to buy once the security reaches a pre-set price above the current market price.

What are the different types of stop-loss orders?

There are three types of stop-loss order. Here are the ones you can use with us: Normal stop loss: this is the type of stop loss we’ve explained above. This stop loss kicks in when the price limit you’ve set has been reached

What is a stop price?

Themarket price that is referred to, in the context of a stop order, is the stop price. When a stop order is triggered, it then effectively becomes a market order, to be executed immediately at the best available price. An exception to such a situation exists if the order is entered as a “stop-limit” order.