stop-limit order

Stop-limit order is a type of transaction order in the crypto asset market that allows investors to control the prices at which they want to buy or sell their digital assets.

How does a stop-limit order work?

A stop-limit order consists of two main elements: a stop price and a limit price. The stop price determines the level that activates the order, while the limit price determines the price at which the order is executed. When the market price reaches the stop price, the stop-limit order is activated and converted into a limit order.

Advantages of a stop-limit order

One of the main advantages of a stop-limit order is the control over the price at which we want to make a transaction. This allows investors to avoid unfavorable price changes in the market, ensuring certainty in the execution of the order under specific conditions.

Risks associated with a stop-limit order

While a stop-limit order gives investors control over transaction prices, there is a risk that the order may not be fully or at all executed if the market price exceeds the specified value. Furthermore, in the case of sudden price fluctuations, the order may be executed at an unfavorable price different from the limit price.

Summary

A stop-limit order is a useful tool for investors in the crypto asset market, enabling them to control transaction prices. However, it is important to be aware of the risks associated with its use and to monitor market changes in order to make informed investment decisions.