A Stop-Limit order is a conditional trading order that allows you to set a Trigger Price (Stop Price) and an execution limit (Limit Price) for buying or selling futures contracts. This order type gives you greater control over your trade execution.

Trigger Price can be based off one of the three price indices: (a) Mark Price, (b) Last Traded Price, or (c) Index Price (i.e. price of the contract’s underlying). By default, Mark Price is used as the Triggering Index 

 How Does It Work?

• The order activates only when the Stop Price trigger as per the selected Triggering Index (Mark Price, Last Traded Price, or Index Price). 
  
  

• Once triggered, it places a limit order on the order book using the limit price and quantity you’ve set.
  

Important

• For a Buy Stop-Limit Order, the Stop Price must be above the current Mark Price.
  
  

• For a Sell Stop-Limit Order, the Stop Price must be below the current Mark Price.
  
  

 Stages of a Stop-Limit Order

1. Untriggered – The market hasn't yet hit the Stop Price.
   
   

2. Triggered – The Stop Price is reached; a limit order is placed.
   
   

3. Filled – The limit order is executed, if the market reaches your limit price.

 Example

Current Mark Price = $100
 You place a Buy Stop-Limit Order:

• Stop Price = $105
  
  

• Limit Price = $106
  
  

• Quantity = 2 contracts
  
  

If the Mark Price hits $105, your limit buy order at $106 is placed. If the price never reaches $105, the order remains untriggered.

When to Use

Stop-Limit orders are ideal when you want to:

• Enter or exit a trade only at specific price levels
  
  

• Avoid unexpected slippage
  
  

• Maintain control over price, even in volatile markets