i was trading some stock with a stoploss and have one doubt. the current price was for a particular stock which i shorted at 61.8 and i put the stoploss limit order with trigger at 61.85 and limit price at 61.9. now the price reached 61.85 and the order got executed at 61.85 how is that possible if the limit price was 61.9.
When your Stop Loss gets triggered at 61.85 the buy order attached along with it become a normal BUY limit order at 61.90.
Now, you have a normal BUY limit order at 61.90 . When a seller is available at 61.85 , the exchange will match your buy limit order to the lowest price available at the exchange which in your case is 61.85.
The logic is if you can buy at 61.85, why would you want to buy at a higher price of 61.90.
However if the price suddenly goes to 61.95 or over, the exchange will fill your order only at 61.90, the limit price which you have set.
@portfolioplus911 thanks i get it now. but in case where theres bigger difference between trigger and limit does the same happen ? because price can revert even if trigger is reached .
Once the trigger price is met, the order is sent to Exchange for execution based on the best price available.
Supposing you trigger is 61.85 and limit price is 70.00 (in a buy order) and available ask price is below 70.00, then the order is executed.
But if the available ask price is above 70.00 then it won’t get executed until any ask price is below 70.00 is available before expiring at the session end.
Basically, the limit price is the maximum price at which you willing to Buy that order.