Stop-Limit Order

A Stop-Limit Order is a conditional trade that combines a stop price and a limit price, helping traders control when and how their order is executed.

How a Stop-Limit Order Works

First, the stop price triggers the order to be placed on the order book. Once triggered, the trade becomes a limit order with a specified price. For example, if a trader sets a stop at $100 and a limit at $98, the order activates when the price hits $100 but will only execute if the price stays at or above $98.

Why Stop-Limit Orders Are Helpful

Stop-limit orders give traders more control over market entries and exits, especially in volatile conditions. They help avoid slippage and unwanted price execution, making them a valuable tool for risk management. Unlike market orders, these let users define both the trigger point and the minimum acceptable price.