Stop-limit order

Jana does not want to watch an exchange all day. She specifies the fall in price that should start a sale, then separately chooses a price below which she will not sell. The first is the stop, or trigger; the second is the limit, or execution-price boundary. Kraken describes this as activating a Limit order when the stop price is reached. Until then, the order waits for its condition. Once triggered, it still needs a suitable buyer: nobody has promised in advance to buy at either entered price. [1]

For a sale, the limit means “at this price or higher.” For a purchase, it means “at this price or lower.” Investor.gov explains limit orders this way for securities; the same price principle applies to the bitcoin example here. The limit need not be the final trade price, since a better offer may be available. Nor does it say how much bitcoin will sell. It constrains the execution price itself, not net proceeds after fees or the total loss on an investment. [2]

Suppose Jana’s order triggers, but buyers are already offering less than her limit allows. The order will not accept that lower offer. That is exactly what it is meant to do, yet Jana still owns the bitcoin and remains exposed to further falls. FINRA highlights non-execution risk for stock stop-limit orders. This need not be an order malfunction: the price condition can be respected precisely because no trade happens. Setting the stop and limit to the same price does not create missing demand. [3]

Jana may see the stop price reached on one chart while her order keeps waiting. Before concluding that it is broken, she needs to know its reference price. On supported pairs, Kraken offers a choice between the last completed trade and an index, a price calculated using a defined methodology. A brief move on one exchange alone may not move that index far enough. The specific order settings and triggering direction matter; a chart in an unrelated application cannot replace them. [4]

Once activated, Jana’s limit order may find a sufficiently good existing offer and trade immediately. It then consumes liquidity already in the order book and acts as a taker. If it instead rests on the book and trades with a later incoming order, it supplies liquidity as a maker. Kraken explicitly notes that immediately executed limit orders incur taker fees. The word limit therefore does not determine the fee by itself; the actual fill and that market’s fee schedule do. [1]

An exchange can accept an order, trigger it later, and ultimately fill only part of the requested amount. These stages are different. Coinbase Exchange documentation distinguishes an accepted order, a partial fill with an open remainder, and a fully completed order. Jana therefore needs to check the amount sold, each execution price and the quantity remaining. If only part sold, the rest of her bitcoin has neither disappeared nor automatically gained protection from further price falls. [5]

The order’s lifetime also determines what happens next. Kraken describes GTC as lasting until filled or cancelled, and GTD as lasting no later than a specified time. With IOC, any quantity not filled immediately is cancelled. Which options can accompany a stop-limit order must be checked for the particular market and interface. The link to holdings matters too: Kraken warns that a standalone Stop Loss Limit is not automatically tied to a specific position. If Jana sells another way, she should check and, where appropriate, cancel the waiting order as well. [4] [1]

An ordinary Stop order generally turns into a Market order once triggered, seeking available counterparties without guaranteeing the stop price. A Stop-limit order instead insists on its limit and may remain unfilled. FINRA explains this as a trade-off between requiring a price and risking no execution. Neither choice guarantees the best outcome. What matters for Jana is understanding what follows the trigger, then using the fill history to establish what actually sold. [3]