Stop-Limit Order
A two-stage order: a stop price triggers the order, then a limit price caps the worst acceptable fill.
A stop-limit order combines a stop and a limit. You set two prices: the stop price (trigger) and the limit price (worst acceptable fill). When the stop is reached, a limit order — not a market order — is released.
This prevents filling at a terrible price during a fast market, but introduces no-fill risk: if the price gaps through your limit, the order is never executed and the position remains open.
Use stop-limits when you are willing to stay in a trade rather than accept a catastrophic fill, but understand the protection is not absolute.
On the desk
Stop at $47.00, limit at $46.50. When XYZ hits $47.00 a sell limit at $46.50 is placed. If the price gaps to $45.00, the limit is never filled and you remain in the position.