buy stop order price

J

jedwards

Sorry for the basic question, but I'm trying to model a particular trade and I'm wondering what the precise definition of a buy stop order is.

I understand that what it means is that once the "stop" price has been reached, then a market order will be placed to buy the particular security.

However, my question is, what "price" are they referring to? Is it the last traded price? Or is it when the ask price reaches the stop price?

A followup question is, does the same definition of "price" apply to market-if-touched orders, too?

Thanks in advance
 
I would ask your broker.

Also, a trade that so precise with regard to price should probably be more actively watched, either by your own eye or by automated code that you wrote.
 
Exchanges mostly if not all use last sale to elect a stop order. Systems like ours depending on the strategy will use either a TWAP or bid/ask.
....greg
 
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