Investors typically use Stop Limit orders to close out of an existing position. They are intended to either lock in profits or limit losses.<\/p>\n\n\n\n
Alternatively, a Stop Limit order can be created to force the investor into a fresh position when a specified price is reached. In this case, the investor has determined that they either want to go long if prices rise above a specific price or establish a new short position should prices fall below a specified threshold.<\/p>\n\n\n\n
The stop price serves as a trigger, which will activate the order when penetrated. A Stop Limit order has the additional component of a limit price associated with the stop price trigger.<\/p>\n\n\n\n
While this added element eliminates the price risk associated with the Stop order, it introduces the risk that the order may not fill at all, and that the investor may \u2018miss the market altogether even if it is triggered.<\/p>\n\n\n\n
The order panel in IBKR Desktop can be populated by either clicking on a symbol in the Portfolio or Watchlist screens or typing in a symbol in the search bar. Once the symbol is selected the investor can click \u201cBuy\u201d or \u201cSell\u201d to create an order window. In this example the investor chooses to create a \u201cSell\u201d Stop order to close out an existing position in AT&T if the stock goes below a certain price. The investor right clicks on \u201cT\u201d in the portfolio and selects close position to populate the order ticket with the position and have it set to \u201csell\u201d. Directly below are three order types; Limit, Market, and Stop. The investor clicks on Stop and then scrolls in the drop-down and selects \u201cStop Limit\u201d. They can adjust the limit and stop prices in the lines below. The Stop price is the price at which the order will be triggered. The order will not be filled worse than the limit price.<\/p>\n\n\n\n
Next the investor selects the Time-in-force by clicking on the box. They can select Day or Good \u2018Till Cancelled, known as GTC. In this scenario the investor would like to keep the stop order active past the current trading session, so they select GTC. For more information on these terms please see the IBKR Traders\u2019 Glossary.<\/p>\n\n\n\n
When the investor is satisfied with the order inputs, they can either click on \u201cPreview\u201d to see a breakdown of the order as well as its effect on margin, \u201cSave\u201d to save the order to be transmitted later, or \u201cTransmit\u201d to send the order. The investor chooses \u201cSubmit Sell Order\u201d and the Order Confirmation screen appears. Once satisfied they click \u201cTransmit\u201d to send the order. Once sent if not filled, the investor can view trades, modify the order, cancel order from the Order Confirmation screen.<\/p>\n\n\n\n
A Stop Limit order is an instruction to submit a buy or sell limit order if and when the user-specified stop trigger price is attained or penetrated. A Stop Limit order is not guaranteed to fill or be triggered.<\/p>\n","protected":false},"excerpt":{"rendered":"
In this lesson, we\u2019ll define the objective of the Stop Limit order type and show the investor how to create a Stop Limit order in IBKR Desktop.<\/p>\n","protected":false},"author":1134,"featured_media":204941,"parent":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":true,"footnotes":""},"contributors-categories":[149],"traders-academy":[100,103,105],"class_list":{"0":"post-204940","1":"trading-lessons","2":"type-trading-lessons","3":"status-publish","4":"has-post-thumbnail","6":"contributors-categories-interactive-brokers","7":"traders-academy-beginner-trading","8":"traders-academy-level","9":"traders-academy-trading-lesson"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n