Can I use a stop limit order instead of a stop loss order to prevent a bigger loss during a stock gap down?
A. Stop limit order is placed to purchase or sell a stock at a specified price only or better. We recommend using this order when purchasing a stock. But while selling you should use a stop loss order because if the stock gaps down below your stop limit order and continues going down your order will never be filled. On the other hand, a stop loss order will guarantee an execution at the “market price” after your specified level is breached, which could save you a bundle.
