Re: Stop Limit Orders
Originally Posted by
JTH
Thanks Lady
I think I now understand the buying part, but I'm a little confused on how I would use this to sell
I'll give that a shot as well, and if I get it wrong, someone please correct me, okay?
So now let's assume that ABC is trading at $40 and we want to sell the stock once it begins to show some serious downward momentum, but we don't want to just dump it. We put in a stop-limit order to sell with the stop price at $35 and the limit price at $34. If the price of ABC Inc. moves below $35 stop price, the order is activated and turns into a limit order. As long as the order can be filled over $34 (the limit price), then the trade will be filled. If the stock gaps under $34, the order will not be filled.
How did I do?
Lady
If you think education is expensive, try ignorance. - Derek Bok