Buy stop limit order
Family II · Orders
Not to be confused with stop loss, limit order, stop order.
Buy stop limit order is a conditional order type that combines a stop trigger with a limit price. Once the market trades at or above the stop price, the order becomes a buy limit order at the specified limit price. The limit price is typically set at or below the stop price, and the order may remain unfilled if the market moves away.
How it works
A buy stop limit order has two prices: a stop price and a limit price. The stop price activates the order; the limit price sets the highest price at which the trader is willing to buy. When the market reaches the stop price, the order is released as a buy limit order. If the market is at or below the limit price, the order can execute immediately; otherwise, it rests until the market falls to the limit or the order is cancelled. This differs from a standard buy stop order, which becomes a market order and can fill at any price after the stop is triggered.
Worked example
Key considerations
- The limit price caps the purchase price, but the order may not fill if the market gaps above the limit after the stop is triggered.
- Some brokers may not support buy stop limit orders or may require the limit price to be set within a certain range relative to the stop price.
- Regulatory rules on order types and price bands vary by jurisdiction and market.
Often confused with
- stop loss
- A stop-loss is an order intended to limit losses on an existing position, often becoming a market order when triggered; a buy stop limit order is an entry order that becomes a limit order, and the visible sign is that a stop-loss is usually a sell order while a buy stop limit is a buy order.
- limit order
- A limit order is a single instruction to buy or sell at a specified price or better, with no stop trigger; a buy stop limit order adds a stop price that must be reached first, and the visible sign is the presence of two prices: a stop and a limit.
- stop order
- A stop order becomes a market order when the stop price is reached, while a buy stop limit order becomes a limit order; the visible sign is that a stop order has only one price (the stop) and no limit price.