← Glossary · Buying and selling
Stop-limit order
A stop that becomes a limit order when triggered, instead of selling at the next price.
A stop-limit order has two levels: the stop that triggers the order and a limit below which it will not sell. When the price falls to the stop, a limit order is created.
Advantage: you do not sell far below what you expected, for example after a gap. Disadvantage: if the price drops quickly below the limit, nothing is sold and the loss can keep growing.