UK Accounting Glossary
A stop-limit order automatically liquidates a stock at a specific price. A stop-limit order is designed to either protect a profit or to minimize a loss. Unlike a simple stop order, which liquidates a position at the best price possible, a stop-limit order liquidates a position at a specific price (or better). This can pose a risk to the investor in a fast-moving market, where it is possible for a stop-limit order to be passed over with no one willing to sell at the specified price. A trailing stop-limit order can be an excellent risk management tool. A trailing stop-limit order placed, say, 50 cents below a stock’s highest trade limits an investor’s loss to 50 cents per share, but if a stock’s price rises, the trailing stop-limit order rises along with the stock, locking in a profit.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Stop-limit Order are sourced/syndicated and enhanced from:
This glossary post was last updated: 6th February 2020.