Author Topic: Help me with stop limit orders  (Read 1098 times)

stephen902

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Help me with stop limit orders
« on: April 17, 2018, 03:52:49 PM »
I've read the difference between stop loss and stop limit orders. I get the idea. So I want to place a stop limit order on my shares of ATVI. Fidelity gives me a field for stop price and limit price. I read the descriptions but I don't understand it.  If I want to place my stop limit at 66/share, what do I place in these boxes?

Thanks.

ILikeDividends

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Re: Help me with stop limit orders
« Reply #1 on: April 17, 2018, 04:11:02 PM »
I've read the difference between stop loss and stop limit orders. I get the idea. So I want to place a stop limit order on my shares of ATVI. Fidelity gives me a field for stop price and limit price. I read the descriptions but I don't understand it.  If I want to place my stop limit at 66/share, what do I place in these boxes?

Thanks.

It's unclear what you're trying to accomplish. 

What are you trying to do?
« Last Edit: April 17, 2018, 04:17:04 PM by ILikeDividends »

stephen902

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Re: Help me with stop limit orders
« Reply #2 on: April 17, 2018, 04:15:50 PM »
There are two fields: "price stop$" and "limit price $"

Do you put 66 in both of them? What is the difference?

ILikeDividends

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Re: Help me with stop limit orders
« Reply #3 on: April 17, 2018, 04:24:38 PM »
There are two fields: "price stop$" and "limit price $"

Do you put 66 in both of them? What is the difference?

You know what a limit order is, right?   The stop is the price the stock needs to trade through before your limit order is entered for execution.

If you put 66 in both fields, your order might or might not get filled at your limit price.  I.e., if the stock drops to 60, then you won't be able to get filled at a 66 limit. 

What you put in for your limit depends on what you are willing to accept for a sales price.  If you don't want to hold the stock under any circumstances under 66, then a stop-limit order is probably not what you want to do.

As an example: if the stock trades at 66, both a stop-loss and a stop-limit order would be triggered.  If the next trade is at 60, after that stop is hit, a stop-loss would be filled at 60, while a stop-limit (with a limit at 66) would not be filled until and unless the stock comes back up to 66 within the period the order is in effect.
« Last Edit: April 17, 2018, 04:33:22 PM by ILikeDividends »

stephen902

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Re: Help me with stop limit orders
« Reply #4 on: April 17, 2018, 07:13:37 PM »
I think I'm getting it. Thank you for your help and patience. I've attached my order for tomorrow. Am I correct in assuming the following:

The order will trigger at 65.50 with a lowest point it will sell at 65.44?
Stop price is set at 65.50 and limit price is 65.44?

So it will sell if the price lands between those figures but not if it drops below the 65.44?
« Last Edit: April 17, 2018, 07:16:00 PM by stephen902 »

ILikeDividends

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Re: Help me with stop limit orders
« Reply #5 on: April 17, 2018, 07:31:44 PM »
I think I'm getting it. Thank you for your help and patience. I've attached my order for tomorrow. Am I correct in assuming the following:

The order will trigger at 65.50 with a lowest point it will sell at 65.44?
Stop price is set at 65.50 and limit price is 65.44?

So it will sell if the price lands between those figures but not if it drops below the 65.44?
That's the gist of it, yeah.  Once the stop triggers, it's just like any other limit order.  You'll get 65.44 or better; meaning, even if the next bid is above the original stop, that bid is where you'll fill--assuming you are among the lowest ask at that time.  But you won't fill below 65.44.  If no one bids up to your ask, you won't get filled.
« Last Edit: April 17, 2018, 07:59:23 PM by ILikeDividends »

Telecaster

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Re: Help me with stop limit orders
« Reply #6 on: April 17, 2018, 08:52:55 PM »
Don't use them.  A stop loss order is triggered at the given price, but it is filled at the "at the best available price".  Normally not a big deal, but in a falling market the "best available price" can be and will be far, far below your stop. On the flip side, a limit means your order might not be filled. 

Isn't that the dictionary definition of a lose-lose situation?  Oh, and you get to pay extra for it.