A stop-limit is a type of order which combines features of a stop (i.e. the ability to execute your order at a certain price) with a standard limit order. SelfWealth offer stop-limit sell orders (also informally known as stop-loss orders) as part of our US trading platform.
When a stop-limit sell order is submitted to market, it will remain inactive until the market price of the security drops below a specified 'trigger' price. If the trigger price is met, the order will then become a standard limit order, and fill at the limit price or better.
Stop-limit orders can be placed during the regular trading session with day-only expiry. Note that stop-limit orders are not available during the pre-market session and cannot be extended beyond a day.
How do I place a stop-limit Order?
To place a stop-limit order:
- Navigate to the Place Orders page:
- Input the Stock you wish to place a stop-limit on
- Enter the number of units you wish to sell
- Under 'Trading Session' select Regular
- Under 'Condition' select Stop Loss
- Enter your trigger price (Note: the trigger price must be below the current market price of the security)
- Enter your Price per unit (note: this is the price you wish the stock to be sold at)
- Select Review Order
- Once you are satisfied with your order details, select Confirm Order
What is the difference between the Trigger Price and the Price Per Unit?
When placing a stop-limit Order you will need to enter the Trigger Price and the Price per Unit.
The Trigger Price is the price that the stock needs to reach to activate your sell order in the market. The trigger price needs to be lower than the current market price for the stop-limit to be placed.
The Price Per Unit is the limit price that you wish the stock to sell at once the trigger has been activated.
What do I need to consider before placing a stop-limit Order?
Before placing a stop-limit order, you should consider the following:
As with all limit orders, a stop-limit order may not be executed if the stock’s price moves away from the specified limit price, which may occur if the stock price is particularly volatile.
It should be noted that Short-term market fluctuations in a stock’s price can activate a stop-limit order, so the trigger price and limit prices should be selected carefully.