Is there a further breakdown to either "stop buy " or “stop sale” from Stop Loss order? I know it’s confusing. From my brokerage, I can find stop limit combined with another checkbox for either buy or sell. This is purely a topic discussion, no linking to anything else. Steve
On my brokerage I can place a stop loss/buy, or stop limit loss/buy. The latter becomes a limit order when the threshold price is reached. The former becomes a market order when the price is reached. I’m not sure if that’s what you’re asking, but those are the options I have for stop orders. I’ve never used them much though, when I decide to sell, I usually just place a limit order, but I haven’t sold much in the last 3 months waiting for the market to come back up some.
In CFA contents, I think in the market section, it list stop loss as one type of order But you actually see stop buy or stop sell in the choices, so I confused. I would choose to use more detailed stop by ins tead of stop loss when asnwering Q like this. But i could be wrong. Anyone hsa a clue?
there are stop loss orders and stop limit orders, both buy and sell side. sell side- a stop loss order you’d place below the market. stock’s at 25, your stop loss order to sell goes in at 20. when the stock trades at 20, your order then becomes a MARKET order and is filled in line. This means you could get filled at 20, 20 and change, 19 and change, even $5 if let’s say the stock closed at $22 but the next day had horrible news/earnings and opened up at $5. sell side- a stop limit order is placed also below the mkt. stock at $25, stop limit at $20. when the stock hits $20, your order then becomes a LIMIT order at $20. This means that you will get a fill no worse than $20, but it also means that you might not get your order filled if the stock then falls below 20 and keeps falling. You then are just left with an unfilled limit order back up there at $20. buy side, it’s same thinking- you’re trying to catch a stock if it starts running. Stock at $20, you put in a buy stop at $25. Once stock runs up to $25, MARKET order- you get done for sure, you just don’t know price exactly. Buy stop- once it hits $25, your order becomes a limit order at $25, so you will fill no worse than $25 if your order goes off, but it’s not certain that you’ll get done if the stock keeps running. as a former trader, unless you’re going away on vacation for 6 months, don’t place these orders… you’re last in line behind mkt and limit orders… you’re asking a mkt maker to scr8w you. don’t be cute, just buy the thing if you want it or sell it if you want to sell it. hope that clarifies it for you.