They combine the features of a Stop and a Limit Order. You set both a Stop and a Limit price. When the Stop price is reached, the order is converted into a Limit order. Then, the new Limit order will be executed once it reaches its target or a better price.
Why do investors use Stop Limit orders?
These orders are intended to protect you from market gaps. The limit and stop target prices set a range of execution. If this range is surpassed, the order will remain pending until the market price returns to your desired levels.
Investors use a Stop-Limit to minimise potential losses or protect their profit in case the stock moves in the wrong direction. Once activated, Limit orders will execute only if a specified price is met for the trade in full, ceasing if the price turns unfavourable.
What is the principle behind setting a Stop-Limit?
Buy
The Stop price should be above the current market price of the security and below the Limit price.
Sell
The Stop price should be below the current market price of the security and above the Limit price.
How do I set a Stop-Limit BUY order?
- Select an instrument and tap Buy.
- Tap the order type selector and select Stop-Limit order.
- Set the stop price that converts your order to a limit order. The price should be above the current price. Tap Continue.
- Set the maximum price you are willing to pay per share on the Limit price screen.
- Tap Save.
- Select the Number of Shares.
- Review and submit the order.
The execution of the order will depend first on the Stop Price and thereafter on the Limit.
How do I set a Stop-Limit SELL order?
- Select an instrument you own and tap Sell.
- Tap the order type selector and select Stop-Limit order.
- Set the stop price that converts your order to a limit order. The price should be below the current price. Tap Continue.
- Set the minimum price you are willing to accept per share on the Limit price screen.
- Tap Save.
- Select the Number of Shares.
- Review and submit the order.
The execution of the order will depend first on the Stop Price and thereafter on the Limit.
🤓 Tip
On the Limit price screen, Back returns you to the Stop price screen, and Close (X) returns you to the previous order type without saving.
What if my Limit is below the Stop for a Buy, or above it for a Sell?
You will see a warning. For a Buy, the order will only execute if the price drops after reaching the stop. For a Sell, it will only execute if the price rises after reaching the stop. You can still save the prices and place the order.
đź“„ Note
For Stop-Limit orders, the estimated amount takes the Stop price into account.
For Stop-Limit Buy orders, you can use up to 95% of your available funds. Since the order executes as a Limit order once triggered, this buffer protects you from a negative balance if the price moves quickly.
đź“„ Note
The order will remain pending, and the funds needed for its execution will be blocked until the price is reached. It cannot be modified unless cancelled and replaced by a new order of the same or a different type.