# What happens when the price goes lower than stop limit

Suppose Stop price is 45 and Stop Limit is 46. What happens if the price went far lower than 45 and never recovered?

I suppose I would lose huge because the order would only get executed at 46 or higher (favourable = more profit for the seller). Is it correct?

So to limit the loss, use stop order without stop limit is the better way?

## Stop-Limit Order

A stop-limit order consists of two prices: a stop price and a limit price. This order type can be used to activate a limit order to buy or sell a security once a specific trigger price or stop has been met.

For example, imagine you purchase shares at \$100 and expect the stock to rise. You could place a stop-limit order to sell the shares if your forecast was wrong. If you set the stop price at \$90 and the limit price as \$90.50, the order will be activated if the stock trades at \$90 or worse. However, a limit order will be filled only if the limit price you selected is available in the market. If the stock drops overnight to \$89 per share, that is below your stop price, so the order will be activated, but it will not be filled immediately because there are no buyers at your limit price of \$90.50 per share. The stop price and the limit price can be the same with this order type.

## Stop Market Order

A stop market order will turn into a traditional market order once your stop price is met or exceeded.

In the previous example, the stop-limit order was not filled at \$90.50 because that price was not available in the market when the stock dropped through the stop price overnight.

A stop market order is triggered once the price is equal to or beyond \$90 and in this example will be executed at \$89 or the best alternative price. In these two scenarios, the stop order is used to control losses, and both orders are sometimes referred to as a "stop loss" by traders.