A Stop-limit orders will be converted into a Limit order in the order book once the target price (Stop price) as specified by the investor has been met. Therefore, it has two components: the stop price and the limit price.
The Stop Limit Order entry criteria will be as below: -
- Buy Order > Stop Price must be higher than Ask price
- Buy Order > Limit price must be equal or higher than Stop price
- Sell Order > Stop Price must be lower than Bid Price
- Sell Order > Limit price must be equal or lower than Stop price
The Stop Limit Order will be triggered when:
- Buy > Stop Price ≥ Best Ask
- Sell > Stop Price ≤ Best Bid