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Stop-limit order
A stop-limit order combines two prices: a stop price that activates the order and a limit price that sets the worst price you will accept. When the stop is reached it becomes a limit order rather than a market order, so it may not fill at all.
What it means for you. A stop-limit protects you from a terrible fill but not from a falling price. If the market drops straight through your limit, the order sits unfilled and you still hold the asset as it falls. Choosing the gap between the stop and the limit is the real decision.
Sources: SEC Investor Bulletin: Stop, Stop-Limit, and Trailing Stop Orders, FINRA: Stop Orders: Factors to Consider During Volatile Markets, CFTC Glossary · checked 4 October 2026
Stop-loss order
A stop-loss order is an instruction to sell, or buy back, automatically once the price reaches a level you set, called the stop price. When that price is hit, the order becomes a market order, aiming to cap a loss on a position you hold.
What it means for you. A stop price is a trigger, not a guaranteed price. In a fast or thin market your sale can fill well below the stop, and a brief dip can trigger the sale before the price recovers. Once executed, the trade cannot be undone. Platforms differ on whether the last trade or the quotes trigger it.
Sources: SEC Investor Bulletin: Stop, Stop-Limit, and Trailing Stop Orders, FINRA: Stop Orders: Factors to Consider During Volatile Markets · checked 4 October 2026