Stop Pending Order | Buy Stop and Sell Stop

Pending orders, which are predefined prices to buy or sell an instrument at some point in the future, are often used by traders. In pending orders, trades are not executed until the price of the instruments reaches the desired level.

Two of the most popular pending orders are the buy stop and the sell stop. ‘Buy Stop’ is used when a trader wishes to buy an asset above the current market price in the future. Let’s look at an example. This trader anticipates that the price of his asset will keep rising and has set a buy stop at 1.32. When the current market price reaches 1.32, the trade will be executed.

‘Sell Stop’ is used when a trader wishes to sell an asset below the current market price in the future. Let’s look at an example. This trader anticipates that the price of his asset will keep falling and has set a sell stop at 1.40. When the current market price reaches 1.40, the trade will be executed.