What is a stop-limit order?

A stop-limit order combines a stop and a limit. When the stop price is hit, it triggers a limit order instead of a market order. For example, a stop of $85 and a limit of $83 means: when the stock hits $85, place a sell limit at $83 or better. The risk is that in a fast decline, the price may gap through $83 and your order never fills, leaving you holding the position.