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What is stop limit order

1. Definition

A stop limit order is an instruction to submit a buy or sell limit order when the client-specified stop trigger price is hit. Take a buy order as an example:

Assume the market bid and ask prices of EURUSD are 1.02050 and 1.02060 respectively. You can place a stop limit order by setting a price higher than the current ask price of 1.02060 as the trigger price (e.g., 1.02080), and a price lower than the trigger price as the limit price (e.g., 1.02075). When the market ask price rises to 1.02080, the stop limit order will be triggered and the system will submit a limit order at the price of 1.02075.


2. Explanations and Notes:

2.1 In the hedging mode, stop limit orders can only be used to open positions.

2.2 Placement of the order does not directly freeze the customer's buying power or position. It will be frozen only when the condition of the order is triggered. Please note that triggering of conditional order does not guarantee that the order will be successfully submitted to the LP. The conditional order will be failed to submit due to insufficient buying power or positions of the account at that time.

2.3 After the trigger price is hit, the system will submit a limit order. The type of order to be submitted under stop limit orders will be limit orders. 

2.4 The order so submitted will be processed in the same logic as a limit order is processed. If the order is not filled during its time in force, it will be cancelled automatically by the system after expiration.

2.5 Even if the trigger price is hit, there is no guarantee that an order will be successfully submitted. Orders submitted after the trigger price is hit may become invalid and fail due to insufficient buying power, rejection by the LP, etc.

2.6 On the sell side:

      ● The trigger price should not be higher than the best bid price.

      ● The specified price should not be lower than the trigger price.

      ● The take-profit price should not be higher than the specified price.

      ● The stop-loss price should not be lower than the specified price.

2.7 On the buy side:

      ● The trigger price should not be lower than the best ask price.

      ● The specified price should not be higher than the trigger price.

      ● The take-profit price should not be lower than the specified price.

      ● The stop-loss price should not be higher than the specified price.