Stop-Limit orders are an order type to limit buy/sell a futures contract once the Mark Price hits your specified Stop Price. It is a conditional order which only becomes active once the Stop price has been hit. Once the Stop price has been hit, a limit buy/sell order will be activated based on your precise input.
For complete Stop-Limit orders, you will need to specify the Stop Price, the order quantity, and the order limit price.
Please note that only Mark Price can be used to specify the Trigger Price of a stop order. In the case of a Buy stop order, the stop price must be below the current Mark Price. For a Sell stop order, the stop price must be above the current Mark Price.
A stop order has three states:
Example: Let’s say the price is currently $100. Using a Stop-limit order, you can set a stop buy price at $95. Once/if the price hits $95, a limit order will be added to the order book at your specified price and quantity. If the price does not hit $95, the order will remain active without execution.