Orders and trading · updated October 21, 2026
What is a stop-limit order and how is it different from a stop-loss
A stop-limit order has two prices: one that triggers it (the stop) and one below which you will not sell (the limit). It protects you from selling at a collapsed price, but the risk is that the order never fills at all.
How it works
When the price reaches the stop level, the order does not become a market order but a limit order. It only sells at the limit price or higher. If the price drops straight past the limit without stopping, you keep the stock.
Worked example
You own a stock at $100. You set the stop at $90 and the limit at $88.
If the stock opens straight at $82, the order is triggered but does not sell, because $82 is below the limit. You keep the stock and the 18% loss until the price climbs back above $88.
Worth knowing
The gap between the stop and the limit decides everything: too small and you may not sell; too large and it behaves like an ordinary stop-loss.
When a stop-limit order can fool you
No fill: exactly in the big drops, when you need it most, the order can stay unfilled. Confusion on the buy side: a stop-limit buy is used to get in when the price breaks above resistance, not to buy cheaper.
Related terms
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Questions about a stop-limit order
Stop-loss or stop-limit?
A stop-loss guarantees your exit, not the price. A stop-limit guarantees the minimum price, not the exit. For liquid stocks many choose a stop-loss; for thinly traded ones, a stop-limit.
These explanations are for information only. They are not a recommendation to buy or sell.
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