What is the difference between buy limit and sell stop orders?

The key differences in buy limit and sell stop orders are based on the order type. Understanding these orders requires understanding the differences in a limit order vs. a stop order. A limit order sets a specified price for an order and executes the trade at that price. A buy limit order will execute at the limit price or lower.

What is a stop-limit order?

A stop-limit order combines the features of both a limit and a stop order. A limit order is an order to buy or sell a certain security for a specific price. 1 One thing to keep in mind is that you cannot set a plain limit order to buy a stock above the market price because a better price is already available.

Why does a buy limit order not get filled?

A buy limit order won't get filled if the price of the underlying asset jumps above the order's stated price. This is because the limit price is the maximum amount the investor is willing to pay. In the case of a gap, that price would now be below the market price.

When does a buy limit order execute?

A buy limit order only executes when the market price of the stock is at or below the order's limit price. So, generally speaking, if you place a buy limit order with a price that's above the market price, the order will execute (perhaps at a better price). However, this won't be so if the market price gaps.