In selling stock what does stop, stop limit, and trailing stop mean?

Answer 1

These are limit orders. Suppose if you short sell, you can place a stop loss limit at a higher price. If you give orders to buy at marke price to the broker then you can place a stop order at a price above todays price.

Answer 2

When a stop order is placed on a long position you enter a trigger (stop price). the order executes once the price is hit it places a market order (sold at whatever the current market price is not necessarily the stop price, not always favorable).

e.g. A stock trading at 40 has stop set at 38 will place a market order when it hit 38 (market set the price maybe higher or lower than 38)

When a limit order is placed you will sell at or above the limit price that you set.

e.g. Your long position is at $40 and has limit set at 45. your shares will sell at or above $45 automatically

A stop-limit is a stop order that will execute a limit after the trigger price is met (which lets you decide the price range to buy and not one set by the market)

Your long a stock 40 and set stop-limit set at a stop of 45 and a limit of 46 will place a limit order when it hit 45 and sell at or above 46

A trailing stop is an stop order the is a above or below the current price that adjusts upward on a long position and downward on a short automatically.

If a stock trades at $40 and the trailing stop is set 1 point below it will execute at $39. If the price move up to $42 the stop order will go through at $41.

If some of these seem similar to each other theres a reason. In the days before online discount brokers limit orders were more expensive than market orders so stops were use to control the selling price. Now that limit orders are priced the same as markets the stop part of a stop-limit order are generally used as trigger which can send email and alerts to sell phone while the limit part does the dirty work of selling

Answer 3

A stop is triggered once a stock trades at or below a certain price. A stop limit is an order to sell at a certain price or above and a trailing stop is an order you keep moving up as the price of the stock moves up as a means to lock in gains.