Narrator: Looking to place a stop limit order? A stop-limit order is a way to exit or enter a position that combines the features of a stop order and a limit order. Here, you'll explore how to place a sell stop limit order on a stock you already own. To start, Click on Trade, and select All-In-One Trade Ticket.
Mouse clicks on All-In-One Trade Ticket.
Narrator: Designed to make trading intuitive, the tool populates relevant data as you build your order, starting with the symbol and strategy.
Amazon stock is searched.
Narrator: If you already own the stock, the number of shares you own will appear in the drop-down menu in the Symbol box. You can sell your entire position or only a portion. In the Action list, select Sell, then enter the number of shares you'd like to sell in the Quantity Box.
Mouse selects Sell.
Narrator: Next, click the cost basis method to change it, or simply leave as is.
Mouse clicks on cost basis method.
Narrator: Then, in the Order Type list, select Stop Limit.
Mouse selects Stop limit from Order type drop down.
Narrator: To enter a Sell Stop Limit Order, you must enter a Stop price below the current security price and a Limit price less than or equal to the Stop price, ideally the lowest price you're willing to accept.
$85 is entered as Stop price and $80 is set as Limit price.
Narrator: If the security trades at or below the Stop price, the Limit Order to sell the security you entered will be activated and may or may not fill depending on the price fluctuation. Next, in the Timing list, select how you want your order to be active. If you choose Day Only, your stop order will only be active for the current trading day. Or, if you place an order outside of the market hours, your order will be enforced during the next trading day. If you choose Good Until Canceled, your stop order will remain effective for 60 days or until it's filled or canceled.
Mouse selects Day Only from Timing drop down.
Narrator: Once done, you'll see an Estimated Amount, based on the limit price you've entered. When ready, click Review Order to review the stop limit order details.
Mouse clicks on Review Order.
Narrator: Then, just confirm the details to place your trade.
Screen fades to blue.
Narrator: It's important to note that stop orders may be triggered by a short-lived, dramatic price change. During volatile market conditions the price of stock may fluctuate significantly within a very short period. This volatility could trigger the execution of a stop order while the stock may return to prior price levels within a short time. Sell stop orders may add to price declines during times of extreme volatility. A sell order, if triggered during a sudden and steep market decline, is more likely to result in a trade well below the stop price. Placing stop-limit orders may help manage risks. By using a stop-limit order, as opposed to a stop order, you add certainty with respect to price, but note that trades with a limit cannot be executed for a price lower than the limit price; therefore, in some conditions, a trade may not be executed at all. This may be especially true during periods of volatility. Consider using stop limit orders when your desire is to achieve a targeted price more than an immediate trade execution.
Video outro plays.
Explore how to place a sell stop limit order using the All-In-One Trade Ticket®