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I think a buy stop-limit would do the trick but I'm not totally clear how to set it up.

For instance, I want to place a market order for STOCK that's trading at $75.45 before the market opens but I want to be sure that it is going up before I purchase it. I also want to be sure that it doesn't gap up too much. So is there a way to place an order at say 75.47 but limit it to 75.80 so that it doesn't trigger if the stock jumps too high?

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A Conditional Order allows one to attach one or more stipulations that must be true before the order can be submitted.

Conditions can be any combination of price, time and volume along with operators such as equal to, greater than, or less than. Other conditions include margin cushion, percentage change.

For example, you could require that:

  • XYZ >= $74.47
  • volume > 10 mm
  • or even a condition based on the price of a second security such as SPY > $275. The more conditionals attached to an order, the harder it makes it for the trade to execute.

Such an order would only be possible if your broker offers it.

As to your specifics, it doesn't make sense to place such an order to buy at two cents above current price. A momentary fluctuation in the width of the bid/ask spread could trigger the buy order.

| improve this answer | |
  • OP asked whether "a buy stop-limit would do the trick" and it seems to me it would. Is there a reason you didn't address this but went to a conditional order? – nanoman May 19 at 17:19
  • A conditional order is any order that includes one or more specified criteria. You specify order triggers based on user selected criteria. – Bob Baerker May 19 at 20:51
  • I see. Traditionally, a conditional order was one held by the broker and only submitted when the conditions are met, while exchanges also offered "native" stop and stop-limit orders. But the latter are disappearing (NYSE no longer offers them), so stop and stop-limit orders often have to be "simulated" using an instance of conditional orders. Your answer might improve if you acknowledge that at least historically there was an order type known as "stop-limit" and that this is indeed close to what OP wants. – nanoman May 19 at 21:01

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