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Limit Orders vs. Stop Orders

While Limit and Stop Orders may appear as similar order types, it is good to know that their purposes and use are different. 

Below you will find the comparison between the two types of orders based on their properties and application. 

   Limit 'BUY' Orders

 

    Stop 'BUY' Orders
  • downward price trend;
  • target price must be below current price;
  • remains pending, if target price is surpassed;
  • may take multiple orders to fill;
  
  • applicable in upward market trends;
  • target price must be above current price;
  • will execute, if target price is surpassed;

 

   Limit 'SELL' Orders

 

   Stop 'SELL' Orders
  • upward price trend;
  • target price must be above current price;
  • may take multiple orders to fill;
  • will execute, if target price is surpassed;
  
  • applicable in downward price trends;
  • can help avoid greater losses
  • target price must be below current price;
  • remains pending, if target price isn't reached;

*Fractional shares cannot be purchased & sold with Limit and/or Stop Orders. 
** All funds needed for the execution will remain blocked while the Limit or Stop Order is pending. 
***Both types of orders cannot be modified unless cancelled and replaced by a new order of the same or a different type. 

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