Sell Stop Limit Order

A Sell Stop Limit Order is an order that combines the features of a Sell Stop Order with those of a limit order. A Sell Stop Limit Order will be executed at a specified price (or above) after a given stop price has been reached.

Once the stop price is reached, the order becomes a Sell Limit Order, filled at the limit price specified or higher.

Example: Suppose you own 100 shares of Bank of America (BAC) and you are looking to sell them if the stock's price falls a bit lower. Assume BAC is currently trading at $45 per share. You place a Sell Stop Limit Order for $41 on BAC, with a Limit (minimum you're willing to accept) at $40.

Suppose BAC then proceeds to trade down to $41. At that time, your order would become a Sell Limit Order and your order would be filled at the next best available price as long as the stock still trades above your specified limit price of $40.

The main benefit of a Sell Stop Limit Order is that you have some control over when your sell order will be filled and you have set a minimum price you are willing to accept to sell your shares.

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 below your limit price, you will not be filled.

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