Though they sound similar, they are diametrically opposite, in that they are used in entirely different scenarios.

Sell Stop Order (Regular Stop)

Here, the price is going UP – and you want to dispose of the stock once a target price is reached. This is not a stop LOSS order – since your position is not in loss. Your position is gaining, as the stock rises,  but you would like  to lock in your gains (at the stop price) and get out.

Sell Stop Limit Order (also known as Stop LOSS order)

Here, the price is going DOWN – and you want to limit your losses and sell at the stop (aka stop loss) price. However, you can put a LIMIT price – BELOW your stop price – at which point you want to cancel this order. The intent is – once the stock reaches THAAAT low, you might as well hold on to it. It is slightly confusing to see TWO prices instead of one on the order.

Hope that helps clarify STOP SELL and STOP LIMIT SELL orders.

 

Anuj holds professional certifications in Google Cloud, AWS as well as certifications in Docker and App Performance Tools such as New Relic. He specializes in Cloud Security, Data Encryption and Container Technologies.

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