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Limit Orders vs. Stop Orders

Although Limit and Stop Orders may seem like similar order types, their purposes and uses differ. 

We have compared the properties and applications of the two types of orders below. 

   Limit 'BUY' Orders

 

    Stop 'BUY' Orders
  • downward price trend;
  • target price must be below current price;
  • will execute, 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;

Note: All funds required for the execution will remain blocked while the Limit or Stop Order is pending.

Note: Neither type of order can be modified unless it is cancelled and replaced by a new order of the same or a different type.

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