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What is The Stop-Limit Function and How to Use It

2017-12-11 10:53

What is a stop-limit order?

A stop-limit order is a limit order that has a limit price and a stop price. When the stop price is reached, the limit order will be placed on the order book. Once the limit price is reached, the limit order will be executed.
  • Stop price: When the asset’s price reaches the stop price, the stop-limit order is executed to buy or sell the asset at the limit price or better.
  • Limit price: The selected (or potentially better) price at which the stop-limit order is executed.
You can set the stop price and limit price at the same price. However, it’s recommended that the stop price for sell orders should be slightly higher than the limit price. This price difference will allow for a safety gap in price between the time the order is triggered and when it is fulfilled. You can set the stop price slightly lower than the limit price for buy orders. This will also reduce the risk of your order not being fulfilled.
Please note that after the market price reaches your limit price, your order will be executed as a limit order. If you set the stop-loss limit too high or the take-profit limit too low, your order may never be filled because the market price cannot reach the limit price you set.

How does a stop-limit order work?

The current price is 2,400 (A). You can set the stop price above the current price, such as 3,000 (B), or below the current price, such as 1,500 (C). Once the price goes up to 3,000 (B) or drops to 1,500 (C), the stop-limit order will be triggered, and the limit order will be automatically placed on the order book.
Note:
  • Limit price can be set above or below the stop price for both buy and sell orders. For example, stop price B can be placed along with a lower limit price B1 or a higher limit price B2.
  • A limit order is invalid before the stop price is triggered, including when the limit price is reached ahead of the stop price.
  • When the stop price is reached, it only indicates that a limit order is activated and will be submitted to the order book, rather than the limit order being filled immediately. The limit order will be executed according to its own rules.

How to place a stop-limit order on Binance?

1. Log in to your Binance account and go to [Trade] - [Spot]. Select either [Buy] or [Sell], then click [Stop-limit].
2. Enter the stop price, limit price, and the amount of crypto you wish to purchase. Click [Buy BNB] to confirm the details of the transaction.

How to view my stop-limit orders?

Once you submit the orders, you can view and edit your stop-limit orders under [Open Orders].
To view executed or canceled orders, go to the [Order History] tab.