Stop-limit order

A stop-limit is a combination order that instructs your broker to buy or sell a stock once its price hits a certain target, known as the stop price, but not to pay more for the stock, or sell it for less, than a specific amount, known as the limit price.

For example, if you give an order to buy at "40 stop 43 limit," you might end up spending anywhere from $40 to $43 a share to buy a stock, but not more than $43.

A stop-limit order can protect you from a rapid run-up in price - such as those that may occur with an initial public offering (IPO) - but you also run the risk that your order won't be executed because the stock's price leapfrogs your limit.