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Username: Peter

Rating:
Guru Stars

Asked to: Jun Wang

Date Created: 21 Dec 2017
Category 17
Tag Financial
Question What is a 'Stop-Limit Order'?
Advice from Guru
Hello Peter,

A stop-limit order is an order placed with a broker that combines the features of a stop order with those of a limit order. A stop-limit order will be executed at a specified price, or better, after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy or sell at the limit price or better.

A stop-limit order requires the setting of two price points. The first point initiates the start of the specified action, referred to as the stop, while the second represents the outside of the investor’s target price, referred to as the limit. A timeframe must also be set, during which the stop-limit order is considered executable.

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