A stop order waits for a trigger price. A sell stop sits below the price. A buy stop sits above it.
When a trade prints at the trigger, the stop becomes a market order.
A stop-limit order becomes a limit order instead. It fills only at your limit or better, and may not fill at all.
Aug 24, 2015
U.S. stocks opened sharply lower that morning.
SPY opened 5.2% below its prior close and was 7.8% down by 9:35. It closed down 4.2%.
IVV, another S&P 500 fund, fell more than 20% below its prior close.
Trading paused 1,278 times under the Limit Up-Limit Down plan. 1,058 of those pauses were in 327 exchange-traded products, ETFs among them.
19.2% of those products fell 20% or more that day, against 4.7% of company stocks.
On NYSE Arca, market orders made up 94% of the selling left unmatched in auctions after a pause.
Those figures are from the SEC staff’s research note of December 2015.
After it
In December 2015, the NYSE filed to stop accepting stop orders. It said triggered stops can exacerbate market volatility.
Gaps to NAV now
95 of 570 ETFs closed more than 1% from NAV on at least one day from Oct 23, 2025 to Oct 22, 2026.
Gaps during the day can be larger than gaps at the close.
How each order behaves
A sell stop fills at the next bid after the trigger. A sell stop-limit sets the least you accept.
A buy stop fills at the next ask. A buy stop-limit sets the most you pay.
The limit orders guide shows how to set a limit.