Stop-Limit OrderSTP LMT
A stop-limit order becomes a limit order once a trigger price is reached, giving control over the price but no guarantee of a fill.
A stop-limit order has two prices. The stop price is the trigger; the limit price is the worst price you will accept once it is triggered.1 That solves the main weakness of an ordinary stop — a fill far below the stop in a fast market — but creates a new one: if the price moves through your limit, the order may never fill and you stay in a losing position. This entry shows how to set both prices and when each kind of stop makes sense.
- Category
- Order Types
- Reading time
- 6 min
- Also called
- Stop limit, Stop-limit, Stop limit order
- Updated
A stop-limit order in plain words
A stop-limit order combines a stop order and a limit order. Once the stop price is reached, it becomes a limit order that will only execute at the specified price or better.2
The stop and limit prices do not have to be the same. A sell stop-limit with a stop of $3.00 and a limit of $2.50 becomes active at $3.00, but can only execute at $2.50 or better.2
How to set a stop-limit order, step by step
Choose the stop price
This is where your trade idea fails, the same as for an ordinary stop-loss.
Choose the limit price
For a sell, set it at or below the stop. The gap between them is how much slippage you will tolerate.
Understand the trigger
Brokers differ: some use last-sale prices to decide whether the stop is reached, others quotes.2
When triggered, it becomes a limit order
It will fill only at the limit or better, and may not fill if the price moves away.2 See Limit Order.
Plan for the no-fill case
Decide in advance what you will do if the price gaps through your limit — accept a market exit, or hold?
Remember intraday spikes
Like a stop, it can be triggered by a brief intraday move, leading to a much worse result than the day’s close.2
Worked examples
Example 1 — A normal fill
FilledYou own 100 shares at $52 and place a sell stop-limit: stop $48, limit $47.50. The price drifts down through $48 and trades at $47.80.
| Triggered at | $48 |
| Filled at (≥ limit) | $47.80 |
| Loss | 100 × $4.20 = −$420 |
In an orderly market the stop-limit behaves like a stop with a price cap: you are out, close to where you planned.
Example 2 — A gap through the limit
Not filledSame order, but after bad news overnight the stock opens at $45 and keeps falling to $41.
| Triggered | Yes, at the open |
| Filled | No — price is below the $47.50 limit |
| Position at $41 | 100 × −$11 = −$1,100 |
The limit protected you from selling at $45 — and left you holding at $41. A plain stop would have sold near $45 for a $700 loss.
Example 3 — A buy stop-limit for a breakout
EntryA stock is ranging below $30. You place a buy stop-limit: stop $30.10, limit $30.40, to buy if it breaks out — but not chase it beyond $30.40.
| Break to $30.25 | Order fills at ≤ $30.40 |
| Gap open at $31 | Order does not fill |
| Purpose | Enter on the break without overpaying |
Buy stop-limits are a common way to enter breakouts with a cap on the price paid.
A sell stop-limit in two markets
Stop order vs. stop-limit order
| Aspect | Stop (market) order | Stop-limit order |
|---|---|---|
| When triggered becomes | A market order2 | A limit order2 |
| Fill guaranteed? | Usually fills | No — may not execute2 |
| Price guaranteed? | No — can deviate significantly2 | Limit or better |
| Risk in a gap | Bad fill | No fill, position still open |
| Best for | Getting out no matter what | Avoiding very bad fills in liquid markets |
When traders use stop-limit orders
Avoiding panic fills
In thin or volatile markets, a limit stops a triggered order from filling at an absurd price. See Liquidity.
Breakout entries
A buy stop-limit enters on a break while capping the price paid.
Crypto and extended hours
Where liquidity can vanish, many traders prefer a limit on every order.
Pairing with an alert
Some traders combine a stop-limit with a price alert so they can act manually if it does not fill.
Advantages and disadvantages
Advantages
- Caps the price you receive or pay once triggered.2
- Prevents extreme fills in thin markets or flash moves.
- Useful for disciplined breakout entries.
Going deeper
Read as far as you need. Each level builds on the one before it.
The gap between stop and limit
Beginner
Setting the limit equal to the stop gives the most price control and the highest chance of no fill. A wider gap gives up a little price for a better chance of getting out.
Sizing the gap to volatility
Intermediate
A common approach is to set the limit a fraction of the asset’s typical move below the stop — for example a quarter or half of the average true range. In calm markets that almost always fills; in a gap it may still not.
Availability and trigger rules
Advanced
Not every broker offers stop-limit orders on every product, and trigger rules differ.2 On futures and crypto exchanges, the trigger may be based on the last price, the mark price or the index price — each behaves differently in volatile moments.
Common mistakes
Setting the limit equal to the stop in a fast market
The order often triggers and then sits unfilled as the price moves away.
Assuming you are protected in a gap
A stop-limit cannot fill below its limit; a large gap leaves you fully exposed.
Forgetting unfilled orders
A triggered but unfilled stop-limit stays open as a limit order; review it.
Using it where you must exit
If getting out matters more than the price, use a plain stop.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- A stop-limit has a trigger (stop) and a worst acceptable price (limit).
- Once triggered it becomes a limit order that executes at the limit or better.
- It protects against bad fills but may not fill at all in a gap.
- The gap between stop and limit sets how much slippage you accept.
- Use a plain stop when getting out matters more than the price.
Frequently asked questions
Why did my stop-limit order not fill?
Should the limit price be the same as the stop price?
Is a stop-limit better than a stop-loss?
Further learning
- Stop Loss
The plain stop, and when it is the better choice.
- Limit Order
What a stop-limit turns into when triggered.
- Price Gap
The situation where stop-limits most often fail to fill.
- Trailing Stop
A stop that moves with the price.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- Investor.gov (SEC). Understanding Order Types – Investor Bulletin (opens in a new tab) Checked .
- Investor.gov (SEC). Stop, Stop-Limit, and Trailing Stop Orders – Investor Bulletin (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Stop-Loss Orders (opens in a new tab)
- Investopedia: Stop-Limit Order (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.