How does a stop order differ from a limit order?

remember that the key difference between a limit order and a stop order is that the limit order will only be filled at the specified limit price or better; whereas, once a stop order triggers at the specified price, it will be filled at the prevailing price in the market—which means that it could be executed at a price significantly different …

What does stop limit order mean?

A stop-limit order is a tool that traders use to mitigate trade risks by specifying the highest or lowest price of stocks they are willing to accept. The trader starts by setting a stop price (order to buy or sell a stock once the price’s reached a specific point), and a limit price (an order to buy or sell a specific number of stocks when the price reaches a specific point).

Should I always use a limit order?

You can use limit orders whether you’re buying or selling. They work on both sides of a transaction. Limit orders might have to wait in line for attention from a stockbroker, potentially slowing down the trading process.