2019: How to enter limit or stop loss orders on Fidelity Investments for stocks and ETFs? How much broker is charging for buy and sell stop loss and limit orders?

Placing Limit and Stop-Loss Orders on Fidelity

Did you just recently open a Fidelity brokerage account? If so, you may be wondering how to get started, more specifically – how to start placing trades. This article will walk you through two of the most popular order types – limit and stop-loss orders – and how to place them in your Fidelity account.

Fidelity Limit Order

Limit orders are perhaps one of the most popular order types when buying and selling stocks because they give the investor more control over the price they pay or receive for their shares, unlike a market order where you have zero control over the price in exchange for a fast execution.

With a limit order, you specify the highest price you’re willing to pay for shares (or the lowest price you’d accept if selling shares) – called the limit price. The broker will then take your order to the market and see if they can get you a better price (a lower price for buys and higher one for sells), and if they cannot they will try to execute your order at your limit price, but under no circumstance would they get you a worse price than your limit price.

Example of a Limit Order on Fidelity

In the below example, we created a limit order to purchase 100 shares of the SPDR S&P 500 ETF (SPY). We indicated a limit price of $298.00, which means we only want the order to execute if Fidelity can get us a price of $298 or lower. SPY’s market price at the time the order was created was $299.71, which is almost $2 above our limit price, so our order likely will take some time to get filled, if it does at all.

Fidelity Limit Order

Fidelity Stop-Loss Order

A stop-loss order is most commonly used when selling shares but can be used for purchases as well. The stop-loss order is a conditional order where the investor specifies a “stop price”, which serves as a trigger to activate the rest of the order. In the case of a stop-loss order to sell, once the stock’s market price falls to your “stop price”, the sell order is activated and turns into a market order to sell your shares and is therefore executed immediately at the market price. The stop-loss order is popular for sells because it acts like an insurance policy, protecting you from any losses below your stop price, but also letting your profits continue as long as the stock goes up.

Fidelity Stop Loss Order

Example of Stop-Loss Order on Fidelity

Continuing from our first example, let’s say our order to purchase 100 shares of SPY eventually went through and we now want to set a stop loss order to protect our account from any potential quick drops in the market. I created the below stop loss order to sell 100 shares of SPY with a stop price of $294.00. This means that if and when SPY’s price falls to $294, Fidelity will automatically sell my 100 shares at the market price, but if SPY’s price continues rising and doesn’t hit $294 then my position will remain open.


Continue Reading