SIE practice questioneasyOrder Types
When would a sell stop-limit order be activated?
- AWhen the stock trades at or below the stop price, and then only sells at the limit price or better✓ Correct answer
- BWhen the market price hits the limit price
- COnly at the stop price, regardless of limit
- DWhen the stock trades above the stop price
Explanation
Why A — When the stock trades at or below the stop price, and then only sells at the limit price or better
A sell stop-limit order is triggered at the stop price, becoming a limit order to sell at the limit price or better. Simply hitting the limit price doesn't trigger it, and the others are incorrect.
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