Buy:
- Stop order: A stop order is an order to buy a security once the price reaches a specified level. For example, you could place a stop order to buy AAPL at $100. If the price of AAPL reaches $100, your order will be executed and you will buy AAPL at the market price at that time.
- Stop limit order: A stop limit order is an order to buy a security once the price reaches a specified level, but only at or better than a specified price. For example, you could place a stop limit order to buy AAPL at $100 with a limit price of $99.95. If the price of AAPL reaches $100, your order will be executed and you will buy AAPL at $99.95. If the price of AAPL does not reach $99.95, your order will not be executed.
Sell:
- Stop order: A stop order is an order to sell a security once the price reaches a specified level. For example, you could place a stop order to sell AAPL at $100. If the price of AAPL reaches $100, your order will be executed and you will sell AAPL at the market price at that time.
- Stop limit order: A stop limit order is an order to sell a security once the price reaches a specified level, but only at or better than a specified price. For example, you could place a stop limit order to sell AAPL at $100 with a limit price of $100.05. If the price of AAPL reaches $100, your order will be executed and you will sell AAPL at $100.05. If the price of AAPL does not reach $100.05, your order will not be executed.
It is important to note that stop and stop limit orders are not guaranteed to be executed. If the price of the security does not reach the stop price, the order will not be executed. Additionally, even if the price of the security reaches the stop price, the order may not be executed at the specified price. The order may be executed at a lower or higher price, depending on the market conditions at the time of execution.
