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A few weeks ago I bought some Tesla shares at $908. I held them until Feb. 19 when the price went to $930, putting in a stop-limit order to sell at $915, but not below $900.

Shortly after, the stock immediately crashed to $858.40 (the previous close) and then immediately recovered. My order did not execute.

Would my order have executed if I didn't set the limit, or were the number of shares at $858.40 previously determined and my market order would have executed around $915? Did a buy option or a sell option at the previous close price cause this momentary dip, or was there some other cause? Or is there not enough information to answer this question?

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  • If you set a condition like "sell at $915, but not below $900" then you will not get a fill if price gaps from above $915 to below $900. I don't know what you mean by a "buy option" or a "sell option".
    – Bob Baerker
    Feb 24, 2020 at 19:13
  • I know my stop-limit wouldn't execute. I'm asking if not setting a limit would have caused my order to execute during the dip. The suddenness of the dip and the recovery, and the specific price it fell to is what has me confused. By "buy option" and "sell option" I mean other traders executing options to buy / sell at the previous closing price.
    – Sam T
    Feb 24, 2020 at 19:14
  • A stop order would execute once the stop price is reached and your order would be filled at the current market price, wherever that is. As for "buy option" and "sell option", they are executed at the option's strike price not at the previous closing price. However, that's a transaction between two counter parties and does not not involve the open market (covered option) unless one of the parties wants to close his newly opened assigned position (naked option)..
    – Bob Baerker
    Feb 24, 2020 at 20:02
  • There are many types of stop orders. Main ones are stop-limit and stop-market order. Is unclear to me which ones you use. Seems you use stop-limit orders. A stop limit order as 3 pieces of info: stop price, limit price and amount of stock you want to sell. If the market hits your stop price, a sell-limit order will be placed on the orderbook. Because it gaped, there was nobody willing to buy at the sell-limit price you set. This is normal. This is why sometimes you might want to use stop-market order which takes you out of position no matter the price. Seems you got lucky this time.
    – AIon
    Feb 27, 2020 at 7:35

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Are you sure it was actual market behavior that "the stock immediately crashed to $858.40 (the previous close) and then immediately recovered"? Perhaps it is an error (in whatever quote source you are using) very much like this one.

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  • It must have been this. It was the same provider (Google) and the graph looked basically identical. It came and went occasionally as I refreshed.
    – Sam T
    Feb 24, 2020 at 21:38
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    @Sam T - I looked at Time & Sales and it appears that the low trade was around $871. Something funky happened at that time as no TSLA trades executed for almost 2 minutes, as if there was a trading halt, but no trading halt was recorded at NASDAQ. I think that it was either a single fat fingered trade outside the price range or just bad data.
    – Bob Baerker
    Feb 25, 2020 at 18:16

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