A is an instruction to buy a security once it reaches a price above the current market level, while a sell stop order is an instruction to sell once the price drops below the current market level.
: Becomes a market order when the price rises to or through the specified stop price. Placement : Must be set above the current market price. Common Uses : buy stop vs sell stop
: Entering a trade once a stock breaks above a resistance level, betting that the upward momentum will continue. A is an instruction to buy a security
Stock & ETF Orders: Limit, Market, Stop, & Stop-Limit | Vanguard Common Uses : : Entering a trade once
Both are types of "stop orders" that remain dormant until their trigger price is hit, at which point they become standard market orders to be executed at the next available price. Buy Stop Orders
: Limiting losses on a short position. If you bet a stock will fall but it starts rising instead, a buy stop automatically buys the shares back to "stop" your losses. Sell Stop Orders
