What is stop-limit or trigger-limit order?
A stop-limit order is a conditional order placed at a specific price with a range. It is an extension of the stop/trigger order where buy orders are placed above the market price and sell orders are placed below the market price. But unlike a stop order, you must set a limit price along with the stop/trigger price. When the current market price enters the price range you set (i.e., the price between the stop and limit price), the order will be executed. On the contrary, if the price of the scrip does not enter the set price range, the order will not be executed.
Let’s say you own shares of an Indian company that are currently trading at ₹3,000 per share. You want to sell your shares if the price falls to ₹2,700 or lower, but you don’t want to sell for less than ₹2,600 per share. In this case, you could place a stop-limit order with a stop price of ₹2,700 and a limit price of ₹2,600.
If the stock price falls to ₹2,700 or lower, your stop-limit order would be triggered and the order will be executed at the best available price between ₹2700 - ₹2,600. However, if the X ltd. stock falls to ₹2,700 but does enter the range and goes below ₹2600, the order would not be executed.
To know the procedure to place trigger-limit orders, refer to this article.
What is the stop-loss trigger price?
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What is a trailing stop-loss order?
A trailing stop limit order is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. These orders continuously recalculate the stop-loss price at a fixed amount below the ...
What is a stop-loss order?
It is an order to exit an open position when it reaches a specified price. These orders are designed to limit the investor’s loss.
How to modify the stop-loss?
In trading, stop-loss is one of the integral parts that help you in risk management. Generally, stop loss is placed along with the multi-legged orders such as Cover Orders and Bracket Orders. Once CO or BO is placed, you can easily modify the ...
What is a limit order?
A limit order is a type of order to either buy or to sell a security at a specified price. The order will either get executed at the limit price mentioned by you at the time of order placement or would not get executed at all. If the price does not ...