What is a Stop Limit Order?

A stop limit order is used when you are buying or selling stocks. It is used to tell your broker at what price you would like to sell stocks that you own. The advantage is that the order to carried out right when the price is reached. The disadvantage is that the stock may never reach that price. It works the same way when buying a stock. You are telling your broker at what price you want to purchase a stock. The same advantages and disadvantages apply.