Comment on Stop Loss orders - Limit/Market

Nithin Kamath commented on 12 Jan 2014, 08:39 PM


If a share is trading at Rs 100 and if you place a normal limit buying order at 105, it will get bought immediately at market price, and hence you need to use SL for such situations where you have to buy above the market price of a stock.

If you keep trigger at 104 and limit as 105 for your SL order, what this means is that as soon as the price of the stock goes to 104, your buying order is triggered and a buy order with limit price of 105 is sent to the market. If you do that, it might just get bought at 104 itself. If you want to buy only above 105, you need to keep the trigger price at 105, and limit at probably 105.05 or use SL-M with trigger as 105.

Share X, LTP at 343,

1. SL buy order with trigger price at 346. And only once this buy is executed should you place the others, which is Limit selling at 350 and SL Selling at 343.
2. SL selling order with trigger at 341, and only once this is executed, Buying limit at 337 and SL buy order at 343.

Hopefully this clarifies

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