Stop-limit orders are one of four different order types available using Wealthsimple's self-directed stock trading accounts. Other order types include —
How do stop-limit orders work?
Stop-limit orders allow you to set a stop price and a limit price for a given security. Once a security reaches your stop price, the order is automatically converted into a limit order (either a buy or sell).
What to expect
- Stop-limit orders will not be executed unless markets are open.
- To place a stop-limit order when buying a security, you will need to change your order type to a stop-limit order.
- There are certain restrictions to placing stop-limit buys with Wealthsimple.
- By default, stop-limit orders expire at market close if they cannot fill within the day. Read below on how to extend this expiry.
- Stop-limit orders are 'any-part orders' once triggered. If we can only fill part of your order, we'll try to do it.
- Stop-limit orders are not available for purchasing cryptocurrencies.
Understanding stop-limit buys
A stop-limit buy allows you to choose a stop price and a limit price. With a stop-limit buy, your order must hit the stop price you set to turn into a limit buy order. Stop-limit buys are often used when there is a price you would pay for a stock that is greater than what it is currently trading at.
Example
Company XYZ (trading as XYZ) is about to release its quarterly earnings report and Morgan believes that the stock is going to go up. She would like to buy some stock when it starts showing some upwards momentum.
- Specifically, Morgan wants to buy stock XYZ if it hits $100, as she believes this will be the start of its upwards momentum. At 10:00 am, XYZ is trading at $95.
- Morgan sets up a stop-limit buy order on stock XYZ with a stop price of $100 and a limit price of $100**.
- This means that if the price of stock XYZ rises above or reaches the $100 stop price, her order will automatically convert into a limit order with a $100 limit price.
- At 3:00 pm, the price of stock XYZ rises to $100. This means that at 3:00 pm, Morgan’s order has hit the stop price, and turns into a limit order.
- As her limit price is $100, her buy order will fill as soon as possible, as long as the price of stock XYZ does not rise above $100 before the order is able to fill.
**US stop-limit orders can be submitted with a different stop and limit price.
Understanding stop-limit sells
A stop-limit sell allows you to choose a stop price and a limit price. With a stop-limit sell, your order must hit the stop price you set in order to turn into a limit sell order. Stop-limit sells are often used to limit losses.
Example
Stock XYZ is trading at $100. After doing some research, Morgan discovers that experts believe that the price of XYZ will start to decline in the next few hours. She wants to make sure that if this happens, she sells her shares of XYZ before the price goes too low.
- Specifically, Morgan wants to sell stock XYZ if it drops to $95.
- Morgan sets up a stop-limit sell order on stock XYZ with a stop price of $95 and a limit price of $95**.
- This means that if stock XYZ drops to or below the $95 stop price, her order will automatically convert into a limit order with a $95 limit price.
- At 3:00 pm, the price of stock XYZ drops to $95. This means that at 3:00 pm, Morgan’s order has hit the stop price, and turns into a limit order.
- As her limit price is $95, her sell order will fill as soon as possible, as long as the price of stock XYZ does not drop below $95 before the order is able to fill.
**US stop-limit orders can be submitted with a different stop and limit price.
Supported stop-limit orders through Wealthsimple
Review what stop-limit orders are supported through Wealthsimple below. Please note that we will automatically reject any unsupported stop-limit orders.
When the stop price is higher than the current quote | When the stop price is lower than the current quote | |
CAD buy | Supported | Supported* |
CAD sell | Supported** | Supported |
USD buy | Supported | Unsupported |
USD sell | Unsupported | Supported |
* CAD stop-limit buys
Please ensure that the stop price is greater than the current ask. While orders with stop prices lower than the current market are accepted, their behaviour may differ from what is expected.
** CAD stop-limit sells
Please ensure that the stop price is lower than the current bid. While orders with stop prices greater than the current market are accepted, their behaviour may differ from what is expected.
Frequently asked questions
How do I extend the expiry of my limit order to 90 days?
To extend your stop-limit order expiry to only expire after 90 days and not at the end of the trading day, follow the steps below when placing your order —
- Log in to your Wealthsimple account.
- In the Search name or symbol field, search and select the security you wish to buy.
- On the right side, select Stop limit buy from the Order Type menu.
- Select Place a stop limit order.
- On the new page, check that Stop limit buy is still selected as the Order Type.
- After entering your stop price, highest price and the number of shares you wish to buy, select Buy and then Continue.
- At the bottom of your order summary page, check the box that says Keep my order open until filled or I cancel it.
- Your order will now be open for a maximum of 90 days before expiring.
- Log in to your Wealthsimple mobile app.
- Select the security you wish to buy or sell, and begin placing your order.
- After entering your stop price, limit price and number of shares you wish to buy or sell, select Continue.
- Before confirming your purchase, toggle on the option to keep your order open until filled or cancelled.
- Your order will now be open for a maximum of 90 days before expiring.
What does it mean to partially fill an order?
Once triggered, if a part of your order can be filled (i.e. if you are trying to buy three shares but there are only two available at your limit price or better), this part will still go through.
If your order partially fills, the remaining part of your order will stay open until the end of that trading day, and cancel itself automatically if unfilled. If you extend the expiry of your order, then the remaining part will stay open for 90 days, and cancel itself automatically after this if unfilled.
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