Stop-Loss vs. Stop-Limit: A Price Trigger Does Not Guarantee a Sale
Edited by Steinar Vigdel Kolnes, Editor, Oslo
Price gaps can push stop-loss sales below their trigger or leave stop-limit orders unfilled, while onchain swaps face additional execution checks.
Stop-loss and stop-limit orders respond to a specified price, but reaching that level does not guarantee a sale at that price. A price-gap comparison from The Defiant highlights how the two order types can produce different outcomes.
A stop-loss generally becomes a market order when triggered. If prices fall sharply, execution may occur below the trigger level, depending on available liquidity.
A stop-limit instead places a limit order after its trigger is reached. That price constraint can prevent a sale at an unacceptable level, but it can also leave tokens unsold if the market moves beyond the limit.
Onchain swaps introduce further execution requirements. Available liquidity and transaction checks can affect whether a trade completes, making the distinction between activation and execution important beyond conventional order books.
Source: The Defiant
