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First off, thanks all for the explanations.

Second- I still don't understand the benefit of the stop limit over a normal limit. Here is the example from investmentopedia:

"For example, let's assume that ABC Inc. is trading at $40 and an investor has put in a stop-limit order to buy with the stop price at $45 and the limit price at $46. If the price of ABC Inc. moves above $45 stop price, the order is activated and turns into a limit order. As long as the order can be filled under $46 (the limit price), then the trade will be filled. If the stock gaps up above $46, the order will not be filled."

Why would an investor want to buy a stock at $46 or less when they could have had it for $40- this seems like a ass backwards example.

Let me try a hypothetical situation.

I own stock ABC, it is worth $50/share. I want to sell it if it reaches $55/share. Why wouldn't I just put a limit order to sell at $55? What benefit does using a stop give me since once the price is reach it just becomes a limit order anyway? Even in the situation of specifying a different stop and limit price, I don't see why you just wouldn't set the limit price...
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