medium · Market Microstructure lob
A trader holds a long position and places a 'stop-limit' sell order with a stop price of 90.00 and a limit price of88.00. Following a negative overnight announcement, the stock gaps down and opens at $85.00.
What is the status of the trader's order?
- The order is triggered and converted into a limit sell order at $88.00, which remains unfilled.
- The order is not triggered because price never actually traded exactly at the $90.00 stop.
- The order is triggered and executes immediately at the opening print of $85.00, ignoring the limit.
- The exchange automatically cancels the order since the opening price printed below the $88.00 limit.
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