Stop-Limit Order
A two-stage order: a stop price triggers the order, then a limit price caps the worst acceptable fill.
A stop-limit order combines a stop and a limit. You set two prices: the stop price (trigger) and the limit price (worst acceptable fill). When the stop is reached, a limit order — not a market order — is released.
This prevents filling at a terrible price during a fast market, but introduces no-fill risk: if the price gaps through your limit, the order is never executed and the position remains open.
Use stop-limits when you are willing to stay in a trade rather than accept a catastrophic fill, but understand the protection is not absolute.
Example
Stop at $47.00, limit at $46.50. When XYZ hits $47.00 a sell limit at $46.50 is placed. If the price gaps to $45.00, the limit is never filled and you remain in the position.
Related Terms
Limit Order
An order to buy or sell only at a specified price or better. Guarantees price but not execution.
BeginnerSell Stop
A stop order placed below the current price that triggers a market sell when price falls to the stop level — the standard stop-loss mechanism for long positions.
BeginnerSlippage
The difference between the expected fill price and the actual fill price. Positive slippage benefits you; negative slippage costs you.
BeginnerStop Order
An order that becomes a market order once the asset trades at or through a specified stop price.
BeginnerStop-Loss Order
A stop order placed to exit a position at a loss before it grows larger. The primary tool for managing downside risk.
Beginner