Stop-Limit Orders

A Stop-Limit order combines a Stop-Loss order with a Limit Order. To place a Stop-Limit order, you enter two prices: a Stop Price and a Limit Price. If the market reaches or goes through the Stop Price, your order becomes a Limit Order.

Examples:

  • Sell Stop-Limit: Let's say a security is currently trading at $30.00. You'd like to sell the security if it reaches or goes below $29.00, but only if the security can be sold for $28.00 or more. You can place a Stop-Limit order by setting the Stop Price to $29.00 and the Limit Price to $28.00. If the security reaches or goes below $29.00, your order becomes a limit order with a Limit Price of $28.00.
  • Buy Stop-Limit (This order type is only available for closing covered calls): Let's say an options contract is currently trading at $5.00. You'd like to buy the contract if it reaches or goes above $5.50 per contract, but only if the contract can be bought for $5.60 or less. You can place a Buy-Stop Limit order by setting the Stop Price to $5.50 and the Limit Price to $5.60. If the contract reaches or goes above $5.50, your order becomes a limit order with a Limit Price of $5.60.

Criteria:

  • Sell Orders: The Stop Price must be entered at least $0.01 below the current Bid Price and the Limit Price must be equal to or less than the Stop Price.
  • Buy Orders: The Stop Price must be entered at least $0.01 above the current Ask Price and the Limit Price must be equal to or greater than the Stop Price.