- Video: Setting up a Stop Order
- An Introduction to Stop Limit and Stop Market orders
- 0:41 - Desktop Platform
- 1:47 - Web Browser Platform
- 2:53 - Mobile Platform
An Introduction to Stop Limit and Stop Market orders
A stop limit order allows you to indicate a “stop price” and a “limit price”. The stop price will act as a flip-switch, and once the underlying security hits the stop price, the switch is flipped, which triggers the entry of a limit order. A stop price to sell is triggered when the security is at or dips below the stop price. A stop price to buy will be triggered when the security is at or rises above the stop price. You will be filled at your specified limit price or better. When entering a stop limit order, the limit price can be the same as the stop price. That said, stop limit orders do not guarantee a fill since your order may remain resting if there is a gap up or gap down since your limit order could be away from the market.
A stop market order allows you exit a position if the stop price is breached. When you select stop market, all you need to enter is a stop price since a market order is immediately executed when the stop price is met or breached. Your fill price is unknown since the order will hit the next bid when selling to close or the next ask when buying to close. Although your order is executed you may get an unfavorable fill if price movement was due to a “knee-jerk” reaction.
Currently, our web-browser platform and mobile platform only permits the use of stop orders for stocks, but our desktop platform permits the use of stop orders for single options or stocks. Additionally, stop orders are not supported during the pre-market and after-hours trading session (EXT).
If you are seeking an order type that can help protect your gains or prevent additional losses, stop orders can be an excellent addition to your trading repertoire.
Please remember to select a Time-In-Force (TIF) for your stop order. Your TIF options include placing a Day, GTC, or GTD order. Selecting a TIF will maintain the stop in accordance with your TIF selection. For more information on GTC and GTD orders, please click here.
What Triggers a Stop Price?
For stock buy and sell closing orders, the stop price is triggered by the last price.
For option buy to close orders, the stop price is triggered by the bid price.
For option sell to close orders, the stop price is triggered by the ask price.
If you're using the Active Trader Interface or trading futures and want to learn how to set up a stop order then please visit our Active Trader Overview by clicking here.
No matter which platform you are using, start by lining up a closing order to set up a stop.
Stop Limit: A limit order is sent after the price of the position reaches or breaches the stop price. The stop price acts as a trigger for the entry of a limit order at a set price.
Downloadable Desktop Platform: Inputting a Stop Limit order for a single short option position.
Let's say we sold an Apr 20 SPY 260 put for a $3.00 credit and want to reduce our losses just in case the price rises to $4.
Web-browser Platform: Inputting a Stop Limit for long stock
For this example, we purchased GILD for $75 and want to sell 100 GILD shares at $73.10 (limit order) if the last price hits $73.
Mobile Platform: Inputting a Stop Limit for long stock
In the example below, we will sell 2000 shares of GE at $13.05 (limit order) if the last price hits $13.
Mobile Platform: Inputting a Stop Limit for a long option
A stop order for an option position is entered in Table Mode.
Stop Market: A market order that is sent after the price of the position reaches or breaches the stop price.
Downloadable Desktop Platform: Inputting a Stop Market order for a single short option position.
Again, let's use our short Apr 20 SPY 260 put that was sold for a $3.00 credit and we want to reduce our losses just in case the price rises to $4.
Web-browser Platform: Inputting a Stop Market order for long stock
Again, we'll be using GILD stock that was purchased at $75. In this case, to prevent further losses we will initiate a market order if the stock hits $73.
Mobile Platform: Inputting a Stop Market order for long stock
Here, we'll be using GE stock. In this case, we will initiate a market order once the stock hits $13.
Mobile Platform: Inputting a Stop Market order for a long option
Stop orders for an options position are entered in Table Mode.