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Stop Limit

This is an order that says once the stock's market price touches or goes below the stop limit order price, the stop limit order is activated, but not necessarily filled.

Additional Comments:

The broker is required to sell the stock at or above the stop limit order price, if and only if, there is a willing buyer who will pay the limit order price. Should the market price of the stock fall well below the stop limit order price (this is considered a "gap down" ), then, although your stop limit order has been activated, it will not fill unless the market price of your stock rebounds back to or above your limit order price.

Once the market price of your stock has plummeted below your limit order stop loss price, it could continue to move lower (even to zero) and your limit stop loss order will never fill.

Related Terms:

Stop Order
A stop order is an order to buy or sell a stock once the price of ...

Buy Stop
A buy order where the price stipulated is higher than the current price. The rationale here ...

Stop Market
This type of stop loss order is known by various names, such as "stop," "stop loss," ...

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