An order that combines the features of a Buy
Stop Order with those of a limit order. A Buy Stop Limit
Order will be executed at a specified price (or lower) after
a given stop price has been reached.
Once the stop price is reached, the order becomes a Buy
Limit Order, filled at the limit price specified or
Example: Suppose you are looking to buy 100 shares
of MicroSoft Corp (MSFT) if the stock's price shows some
upward momentum. Assume MSFT is currently trading at $30
per share. You place a Buy Stop Limit Order for $33 on MSFT,
with a Limit (maximum you're willing to pay) at $33.50.
Suppose MSFT then proceeds to trade up to $33.
At that time, your order would become a Buy Limit Order
and your order would be filled as long as the stock still
trades below your specified limit price of $33.50.
The main benefit of a Buy Stop Limit Order is that you have
control over when your order is filled and you have set
a maximum price you are willing to pay.
As with all limit orders, there is no guarantee that your
order will be filled. If the stock price does not reach
your stop price, you will not be filled. In addition, if
the price hits your stop price, but then trades above your
limit price, you will not be filled.