Trading the US market
Stop-limit order
Definition
A stop-limit order has two prices: the stop price triggers it, and the limit price sets the worst fill you will accept. Say you place a sell stop at $49.50 with a limit at $49.40, and the stock gaps to $49.20: the order does not fill and you are still in the trade.
Example
Say a stock trades at $44.70 and you place a buy stop-limit with a stop at $45.00 and a limit at $45.20 to enter a breakout. If the price moves up steadily through $45.00, the order can fill between $45.00 and $45.20. If it jumps from $44.90 straight to $45.60, the order is triggered but stays unfilled unless the price comes back to $45.20 or below.
Hypothetical numbers, for illustration only.
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