This is confusing.

Stop limit at \$65

Why in the spoiler section, the answers are \$64.90 and \$65.05? If following the previous example, shouldn’t it be \$64.95 and \$65.05??

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Hi @FoxMcCloud - thanks for using the forum. First, let’s recreate what’s in the reading material:

An investor goes long 100 shares of stock @ \$70. They place a sell 100 shares @ \$65 stop limit order.

Trading tape: \$65.10… \$64.90… \$64.95… \$65.05… \$64.85

At what price will the order trigger? At what price will the order execute?

Trigger = \$64.90

Execute = \$65.05

The reading material is correct. It’s possible you’re reading the “ticker tape” incorrectly. You’re supposed to read the tape (65.10… 64.90… 64.95…) in order from left to right. While \$64.95 is closer to the stop price, it is not the first price we find below \$65. For the stop to trigger, we’re looking to identify the first price that’s below \$65 on the tape. The first price where this occurs is \$64.90.

Hopefully that solves it for you. Please let me know if you have additional questions.

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Ah!

I see what you mean now. I was thinking “what’s the next lowest price leading to \$65”