What is a stop-limit order?
A STOP-LIMIT Feature allows the trader to set a buy or sell Limit Order which will be triggered once the Stop Order price has been reached. Stop-limit orders help automate order submissions as traders can set everything in advance and do not have to monitor the market all the time as this type of order allows traders to determine when (at what prices) their orders should be submitted to the market and when they should be filled. Stop-limit orders also allow traders to make more profit in case that market prices goes predicted and prevent loss in case that things do not go as planned.
Buy and Sell Stop-Limit Orders:
- Buy Stop-Limit Orders allow an order to be submitted once the Stop-Limit prices meets the specified conditions:
- A Buy Stop Price will serve as a trigger for the Limit Order to proceed.
- A Buy Limit Price is the price that was set by the trader to be executed once the Stop Price has been reached.
If the current market price of a coin is 10 THB, a trader wants to buy the coin at 12 THB but wants his order place when the prices goes up to 15 THB first. So he will set the stop price (the placing price) at 15 THB and limit price (the buying price) at 12 THB.
When the market price moves to 12 THB, his order will not be executed because the market price has not reached the stop price, 15 THB, making his order not yet placed into the order book.
When the market price finally moves to 15 THB (the stop price), this buy stop-limit order will be placed to the market and will be filled when the market price goes down to 12 THB (the limit price).
This kind of buy stop-limit orders is usually associated with technical trading which traders anticipate some sort of price movements in the future. In this case, the trader might anticipate that if the price rises to 15 THB, it will go down to 12 THB later and then jump to a higher price. Therefore, he wants to make sure that the market price movement hits the first condition and follows the anticipated manners before he places his order.
- Sell Stop-Limit Orders allow an order to be submitted once the Stop-Limit prices meets the specified conditions:
- A Sell Stop Price will serve as a trigger for the Limit Order to proceed.
- A Sell Limit Price is the price that was set by the trader to be executed once the Stop Price has been reached.
Q: How long does a stop-limit order last?
A: After hit the stop price, the order will last until the the set limit price is reached and completely filled or until the order is canceled by the trader.
Q: If the volume in the stop-limit order is partially filled, what will happen?
A: The order will stay until all set volume is filled at the set limit price.
Q: How much different can the stop price and the limit price be?
A: The stop and the limit prices exceed 5% difference, the system will notify the trader about the possibility that the order might be filled partially, or take long time to be filled. However, traders can set any prices on their own decisions.