Order clarification please

[saintalan]

Hi, I have viewed the Help & Videos & search but cant find a specific answer.

In chart trading, Right Click gives you 3 options either above/below market price.

I understand the above/below difference but what are the "Sell Stop Limit" & "Buy Stop Limit" options.

Many thanks,

Alan

[NinjaTrader_ChristopherJ]

Hello saintalan,

Thank you for your post.

A Stop Limit Order is a Limit at a price beyond the current traded price.

For example if the market is currently trading at 1.3590 and you want to place a Buy Order at 1.3600 to go long if the market reaches this price you would be required to place a Buy Stop Limit or a Buy Stop Market Order at 1.3600 to achieve this.

Please let me know if I may be of further assistance.

[saintalan]

Thanks Christopher for the fast response.

I thought that was just a Buy Stop & I know I can place a Sell Limit above market price. So what is the third option of Buy Stop Limit? I don't see a difference between that and Buy Stop.

I am new to NT so probably not used to terminology or having a dense moment;-)

Cheers

Alan

[NinjaTrader_Kyle]

Hi Alan,

These are two different order types, Stop Limit and Stop Market.

For definitions of these order types, we'd recommend checking a general resource like Investopedia.

[saintalan]

Kyle thanks but I know I can place a Buy Market order and a Buy Stop order above market price.

The chart trader allows me to use both Buy Stop & Buy Stop Limit at a price above market.

I seem to recall I read (here?) a while back that with the latter, price has to go above and then reverse to activate the Limit.

I have tried Investopedia and other Terminology sites but this seems specific to NT, please could you not just give me a quick answer?

Regards

Alan

[NinjaTrader_Kyle]

Hi Alan,

The best I'm able to define it for you is this:

Stop limit orders use two prices, the stop and the limit to define a range of acceptable fills.

Stop market orders define a stop price at which an order will execute at whatever price the market may be trading at.

[saintalan]

Thanks Kyle I think I understand it but if you or someone was able to give me some practical examples that would be great.

Cheers

Alan

[NinjaTrader_Kyle]

Hi Alan,

I can't really think of an example for you. Can you elaborate a bit on what you're looking for in the example?

These are standard order types - maybe we just have a difference in terminology. Have you tried just using the different order types when trading in simulation?

[Jim-Boulder]

I have a similar question on the way NT handles these 2 type orders (BuyStopMarket and BuyStopLimit), please verify if the following is correct:

1) BuyStopMarket - as you described it--when the buy stop price trades-a market buy order is placed with broker/exchange--it executes almost immediately at the then market price

2)BuyStopLimit - when the stop price is traded, a Buy order is placed at the limit price specified--it will fill at that price or better (or not at all)

Example of a BuyStopLimit:
Current Price is 1200.00
Stop Price: 1200.50
Limit Price: 1200.25

if a trade occurs at 1200.50 a buy limit order at 1200.25 is placed with broker

Note:

Until the stop price is triggered, neither of these 2 orders are residing at the exchange (thus any limit order gets put at the end of the order queue)--correct?

[NinjaTrader_RyanO]

Hi Jim-Boulder,

1. This is correct as the stop-price will determine when the order will then become a market order to be filled.

2. In your example for a buy Stop Limit order that would be a specific type of Stop Limit order known a Simulated Order where the stop price when hit submits a limit order to be filled at a better price than the stop price. More information at: http://www.ninjatrader.com/support/helpGuides/nt7/index.html?sub.htm

However, the typical method of a Stop Limit order is that when the stop price is achieved a limit order at the same price as the stop is submitted but the limit offset of the order would define the range of values you can be filled above the stop price, since we are speaking of buy orders.

Now these orders would reside based on their order status:
http://www.ninjatrader.com/support/helpGuides/nt7/index.html?order_state_definitions.htm

And:
http://www.ninjatrader.com/support/forum/showthread.php?t=5349

[JoshDance]

Kyle thanks but I know I can place a Buy Market order and a Buy Stop order above market price.

The chart trader allows me to use both Buy Stop & Buy Stop Limit at a price above market.

I seem to recall I read (here?) a while back that with the latter, price has to go above and then reverse to activate the Limit.

I have tried Investopedia and other Terminology sites but this seems specific to NT, please could you not just give me a quick answer?

Regards

Alan

Maybe this is the kind of answer you're looking for:

Assume the last price traded is 100.00 (using crude oil as an example)

+ If you place a buy stop limit order at 100.05, offset 5, when price trades to 100.05, the buy limit order is placed at 100.10 (100.05 + 5 ticks is 100.10). If orders quickly flowed in a filled the orders through 100.10 before your orders gets to the queue (price is now to 100.11), then you will not get filled at an unacceptable price--basically, this order type in this case is to prevent slippage. Under "normal" circumstances, though, you would get filled soon, likely at 100.05 or 100.06.

+ The second usage is what you refer to--if I want to buy a breakout of the 100.05 level, but I believe price will trade back to the 99.95 level and want to get a better price by buying there, then I can set a buy stop limit order at 100.05, with a -10 offset. When price trades up 5 ticks to to 100.05, the buy limit is placed at 99.95, 10 ticks down, and if price makes it way back down to 99.95 or lower, you can get filled there.