What Is Sell Stop Limit Video (2024)

FAQs

What is a sell stop-limit? ›

A sell stop limit is a conditional order to a broker to sell the stock when its price falls up to a specific price – i.e., stop price. A sell stop price has two price components – i.e., a stop price and a limit price.

A limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid (with a buy limit) or the minimum price to be received (with a sell limit). If the order is filled, it will only be at the specified limit price or better. However, there is no assurance of execution.

Again, you set the stop price, where you want the sell order triggered. But here's where they differ. You exercise a measure of control over the trade by also setting a limit price. Instead of the trade being executed at the next available price, you specify the lowest price you are willing to sell at.

A buy limit order can be executed only at or below the limit price; a sell limit order can be executed only at or above the limit price. This means you're guaranteed to get your limit price or a better price if your order is executed. However, there's a chance your order doesn't get executed at all.

A sell stop order is entered at a stop price below the current market price; if the stock drops to the stop price (or trades below it), the stop order to sell is triggered and becomes a market order to be executed at the market's current price. This sell stop order is not guaranteed to execute near your stop price.

Example of a Stop-Limit Order

(AAPL) is trading at $155 and that 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 $160 and the limit price at $165.

Sell-Stop Orders

For example, let's say a trader owns 1,000 shares of ABC stock. They purchased the stock at $30 per share, and it has risen to $45 on rumors of a potential buyout. The trader wants to lock in a gain of at least $10 per share, so they place a sell-stop order at $41.

Suppose you just purchased Microsoft (MSFT) at $20 per share. Right after buying the stock, you enter a stop-loss order for $18. If the stock falls below $18, your shares will then be sold at the prevailing market price. Stop-limit orders are similar to stop-loss orders.

This order type allows for a range of the stop-loss. For example, a trigger price of ₹105 and a price of ₹105.10 can be set. When the trigger price of ₹105 is reached, a buy limit order is sent to the exchange, and the order is squared off at the next available offer below ₹105.10.

A limit order sets a maximum price that you're willing to pay or a minimum price that you're willing to accept on a sale, whereas a stop order is triggered when an asset reaches a certain price and filled at the next available price. Also, limit orders are visible to the market, while stop orders are not visible.

What is a sell limit order example? ›

For example, if a trader is looking to buy XYZ's stock but has a limit of $14.50, they will only buy the stock at a price of $14.50 or lower. If the trader is looking to sell shares of XYZ's stock with a $14.50 limit, the trader will not sell any shares until the price is $14.50 or higher.

A sell limit order will execute at the limit price or higher. Overall, a limit order allows you to specify a price. A stop order includes a specific parameter for triggering the trade. Once a stock's price reaches the stop price it will be executed at the next available market price.

Sell limit order

Open the chart and determine the level at which you will enter sales. Since the current price is lower than the set level, choose the “At the price” option. Choose the type of operation "Sell". Next, set the price at which the order should be triggered.

For sell limit orders, you're setting a price floor—the lowest amount you'd be willing to accept for each share you sell. This means that your order may only be filled at your designated price or better. However, you're also directing your order to fill only if this condition occurs.

Equities are generally considered the riskiest class of assets. Dividends aside, they offer no guarantees, and investors' money is subject to the successes and failures of private businesses in a fiercely competitive marketplace. Equity investing involves buying stock in a private company or group of companies.

For example, imagine you purchase shares at $100 and expect the stock to rise. You could place a stop-limit order to sell the shares if your forecast was wrong: If you set the stop price at $90 and the limit price at $90.50, the order will activate if the stock trades at $90 or worse.

Most sell-stop orders are filled at a price below the limit price; the difference depends largely on how fast the price is dropping. An order may get filled for a considerably lower price if the price is plummeting quickly. Stop-limit orders can guarantee a price limit, but the trade may not be executed.

“Buy stop” to open a long position at the price higher than the current price. “Sell stop” to open a short position at the price lower than the current price. “Buy Limit” to open a long position at the price lower than the current price. “Sell Limit” to open a short position at the price higher than the current price.