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If an option has a spread of BID $1 and ASK $1.50 and a sell stop-limit is placed with a STOP $1.20 and a LIMIT $1.15, is the stop triggered by the bid or the ask? That is, this order will not try to execute the limit until the price gets to or goes below $1.20, and if triggered off the bid, then that will execute immediately. I've been told conflicting information as I thought it was based off the ask and not the bid.

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Buy Limit and Buy Stop orders are triggered when the Ask reaches your order's price.

Sell Limit and Sell Stop orders are triggered when the Bid reaches your order's price.

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  • Right, so a Sell Stop-Limit should have the Stop triggered on Ask
    – pstatix
    Commented Oct 6, 2021 at 14:54

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