Basic help with creating stop loss order

[grah33]

Hi
The broker people told me that to do a basic stop loss it's a separate contingency sell order (using their free software i got). but the customer service seemed unsure, and it's not explained in the manual. what do you think (below)? i already went long and the order below is supposed to be a basic stop loss if price moves against me:

trigger when price goes down to 191 ($1.91)
and sell all 117 shares

they said it was key to put "less than or equal" and "market to limit" rather than limit (no other options available like market, and they were disagreeing with each). i care nothing about limiting , i just want to sell it all off like a normal stop loss. the only options were "market to limit" or "limit" in the Pricing Instruction field.
(i wonder exactly what the "market to limit" option is doing...maybe i know but not sure)


thanks again everyone

 

[skc]

Hi
The broker people told me that to do a basic stop loss it's a separate contingency sell order (using their free software i got). but the customer service seemed unsure, and it's not explained in the manual. what do you think (below)? i already went long and the order below is supposed to be a basic stop loss if price moves against me:

trigger when price goes down to 191 ($1.91)
and sell all 117 shares

they said it was key to put "less than or equal" and "market to limit" rather than limit (no other options available like market, and they were disagreeing with each). i care nothing about limiting , i just want to sell it all off like a normal stop loss. the only options were "market to limit" or "limit" in the Pricing Instruction field.
(i wonder exactly what the "market to limit" option is doing...maybe i know but not sure)


thanks again everyone

A few points.

1. Whether you put "less than or equal" or simply "less than" is a matter of choice. But don't put in "equal" as the stock could easily trade at $1.93 then $1.90, without ever trading at $1.91. This stock PME in particular is quite thin.

2. "Market to limit" simply means the triggered contingent order will sell at market up to a certain limit. It looks like you are using WebIress... and from memory I think the default "market to limit" is 6 price steps (please check with your CFD provider). That means if $1.91 is triggered, it will sell 117 shares at market but no less than $1.85 (i.e. 6 price steps below trigger price). This is quite important if you are trading illiquid shares, or large amount of shares.

3. The separate contingent order would work... but if you sell your stock (say taking a profit at $2.50), your separate contingent order doesn't automatically cancel. So remember to cancel it if you are not long the stock anymore. Otherwise it could still get triggered, in which case you'd be net short the stock.

 

[grah33]

A few points.

1. Whether you put "less than or equal" or simply "less than" is a matter of choice. But don't put in "equal" as the stock could easily trade at $1.93 then $1.90, without ever trading at $1.91. This stock PME in particular is quite thin.

2. "Market to limit" simply means the triggered contingent order will sell at market up to a certain limit. It looks like you are using WebIress... and from memory I think the default "market to limit" is 6 price steps (please check with your CFD provider). That means if $1.91 is triggered, it will sell 117 shares at market but no less than $1.85 (i.e. 6 price steps below trigger price). This is quite important if you are trading illiquid shares, or large amount of shares.

3. The separate contingent order would work... but if you sell your stock (say taking a profit at $2.50), your separate contingent order doesn't automatically cancel. So remember to cancel it if you are not long the stock anymore. Otherwise it could still get triggered, in which case you'd be net short the stock.

one learns something new everyday with shares... thanks. i'll be weary as u say.

<< That means if $1.91 is triggered, it will sell 117 shares at market but no less than $1.85 (i.e. 6 price steps <<below trigger price).
but is there a way to make it still sell all the shares off even if it goes more lower - just as you would with a normal stop order. otherwise i could be a goner.

 

[skc]

one learns something new everyday with shares... thanks. i'll be weary as u say.

<< That means if $1.91 is triggered, it will sell 117 shares at market but no less than $1.85 (i.e. 6 price steps <<below trigger price).
but is there a way to make it still sell all the shares off even if it goes more lower - just as you would with a normal stop order. otherwise i could be a goner.

The 6 price steps is only from memory and dated information, you should confirm that with your broker who should know.

If you want a "normal" sell order, then it should strictly be just "at market" if triggered. If that option is somehow not available to you, you can perhaps make it a "limit" with a really low price... like $1.40 in your example. Again, make sure you check with your broker as they may have some order vetting system which prevents anyone from placing an order that is, say, 25 steps from the market.

Each broker and platform operates differently so you need to confirm with them. But it's important to know what you don't know.

 

[grah33]

The 6 price steps is only from memory and dated information, you should confirm that with your broker who should know.

If you want a "normal" sell order, then it should strictly be just "at market" if triggered. If that option is somehow not available to you, you can perhaps make it a "limit" with a really low price... like $1.40 in your example. Again, make sure you check with your broker as they may have some order vetting system which prevents anyone from placing an order that is, say, 25 steps from the market.

Each broker and platform operates differently so you need to confirm with them. But it's important to know what you don't know.

i thought "market to limit" would have been sell at market and the rest that is not filled (if that happens) convert it to a limit order at that value (sell all lower than that limit, lower since it's less than or equal to). but what you are saying is probably more correct. the manual doesn't explain it and the customer service give me different answers. they just don't understand shares properly i guess.

i'll confirm the other details you mentioned as well (i better do that).

 

[blue0810]

..and the customer service give me different answers. they just don't understand shares properly i guess.

.

email your broker. As @ skc said each broker and platform operates differently.

 

[grah33]

i've asked my broker but they give me different answers all the time . the customer service just doesn't know about shares. any ideas of what i should do? i'm thinking the advice here is probably correct - there is a certain number of 'steps' that the limit is restricted to. and that i should use a contingent "limit" sell order rather than the "market to limit" order. one of the guys seemed to say this (the advice given above) while others gave different answers. it's just flawed that the manual doesn't mention it (it's not their main software, but it's FREE which is a help for someone like me).

 

[grah33]

i tried asking again and they gave me a more knowledgeable person this time. he told me that stop loss orders aren't actually possible with dma cfds and that brokers actually implemented them with an algorithm (the asx doesn't do it). and that if i used "market to limit" contingency order with the "less than or equal to" condition, it will be fine. and that the market to limit order has the limit just a few steps lower which will easily be fine for my position sizes (to fill them). so it should be all good. and if i get to bigger position sizes one day , i'll just switch to another broker that do stop losses. by then i wont need the special bargains that this broker is offering me. so yeah, should be fine.