IG Markets Share Trading Platform - Stop-Loss Orders

[johntdrums]

Hi everyone,

I am brand new to Aussie Stock Forums, so treat me gently...

I have had experience trading CFDs but have never owned or traded 'real' shares. I have been trading with IG Markets for a while and they provide a platform which comprises both a "CFD Trading" component and a "Share Trading" component - essentially two platforms in one.

I had never bothered checking out the shares platform as I didn't think I would use it, however on Friday I decided to buy actual shares in an IPO which looked good. At the time of placing my order I couldn't see any feature on the ticket ('If Done', etc) enabling me to set a stop-loss, but I just assumed it would be somewhere else and I could set it up at the next step. However, after I placed the trade that was it, and I couldn't find anything that actually allowed me to set a stop-loss.

Is that how it works with shares? You just have to physically monitor your position in order to stop any losses, or would you simply just set a separate sell order at the price where you would normally want your stop-loss to go? For the moment, I am monitoring my position manually, and if things start to look grim I will place a sell order at my stop-loss level, or just close it out manually as I can do with CFDs (although I don't even know if I can actually do that either).

Even with the option of placing a separate sell order, I have noticed that there is only a day limit to holding the order open. Does this mean I have to keep setting it up every day?

I don't know if this is simply IG's platform or if all share trading platforms are set up like this, but if someone out there can help me with this, I'd really appreciate it.

Ironically, CFDs now seem so straight-forward compared to shares...

Thanks!

 

[Habakkuk]

I don't know about CMC Markets specifically but a stop loss has to be entered under 'Conditional Orders'. Normal order types are 'At Market' or 'At Limit'; you would have used one of those orders when you bought.

It says 'Free Conditional Orders' on CMCs website for shares and CFDs.

 

[johntdrums]

Hi Habakkuk,

Thanks for the reply...

I'm actually using IG Markets, not CMC, but you're right in that I placed my order "At Limit". However, there is nowhere on the IG share trading platform that offers Conditional or Contingent or If Done orders. They're available on their CFD platform (you can simply switch between platforms) but with the shares platform I must have to set a sell order to close my position where my stop-loss would normally go.

Edit: I just found online that IG only offer conditional orders on their CFD platform and not the shares platform - bit strange, but anyway...

How do you guys normally set stops for shares? Do you just place a sell order as I was thinking, or do you use platforms/companies/brokers, etc that provide conditional orders?

Thanks for any input...

 

[Habakkuk]

I'm an idiot. Why did I look at CMC?

Conditional orders don't rate a mention on IG Markets - on quick inspection. A bit surprising because there is a fair bit of competition one would think. Not every broker has that feature and on some of them you had to pay an extra fee, mainly with the banks.

In that case you will have to enter the sell order when it's time. As you would know, the limit orders work differently and can't be used for stop loss.

 

[johntdrums]

I'm an idiot. Why did I look at CMC?

Conditional orders don't rate a mention on IG Markets - on quick inspection. A bit surprising because there is a fair bit of competition one would think. Not every broker has that feature and on some of them you had to pay an extra fee, mainly with the banks.

In that case you will have to enter the sell order when it's time. As you would know, the limit orders work differently and can't be used for stop loss.

Hi again Habakkuk,

I wasn't going to say anything about the CMC mistake, but..... You nearly had me believing they were one and the same!

Yeah, thanks heaps for your response and for the info. As I said, I'm pretty used to just how everything was with the CFD platform, so it sort of threw me a bit. I'll get the hang of it I'm sure, but I just didn't have to worry about all that "Execute and Eliminate", "Fill or Kill", etc before. It's all new stuff!

Cheers again!

 

[Habakkuk]

Hi again Habakkuk,

I wasn't going to say anything about the CMC mistake, but..... You nearly had me believing they were one and the same!

Yeah, thanks heaps for your response and for the info. As I said, I'm pretty used to just how everything was with the CFD platform, so it sort of threw me a bit. I'll get the hang of it I'm sure, but I just didn't have to worry about all that "Execute and Eliminate", "Fill or Kill", etc before. It's all new stuff!

Cheers again!

Upon re-reading your #1 post, properly this time, I'm confused about this:

Even with the option of placing a separate sell order, I have noticed that there is only a day limit to holding the order open. Does this mean I have to keep setting it up every day?

Maybe I have misunderstood something but what you seem to suggest is that if your sell order doesn't get executed at your limit price that day, you need to enter it again the following day. Indeed, you will have to do that if that's how IG work. Are we still talking about a losing trade now or is this a profitable trade where you want a better price than is available?

To use a limit order when you want to/must get out of a losing position seems ambitious to me, even reckless. Pretty much every time I have done that in the past it has cost me dearly. I don't do it any more. I cross the spread and I'm out.

 

[johntdrums]

Upon re-reading your #1 post, properly this time, I'm confused about this:


Maybe I have misunderstood something but what you seem to suggest is that if your sell order doesn't get executed at your limit price that day, you need to enter it again the following day. Indeed, you will have to do that if that's how IG work. Are we still talking about a losing trade now or is this a profitable trade where you want a better price than is available?

To use a limit order when you want to/must get out of a losing position seems ambitious to me, even reckless. Pretty much every time I have done that in the past it has cost me dearly. I don't do it any more. I cross the spread and I'm out.

I'm still talking about a losing trade.... And yes, there is no Good Till Cancelled option on the share trading platform - well at least not where I'm looking (which is everywhere) - so I must have to redo it each day (which is tedious).

So how do I set it up to get out at my stop-loss point (if necessary)? Or how would I even just close the trade for that matter? With CFDs you just hit "close" and it's done, or you simply have a set stop-loss level and you're stopped out... Can't understand why the share trading is different. Anything to do with being DMA as opposed to OTC?

 

[Habakkuk]

No, I'm still talking about a losing trade.... So how do I set it up to get out at my stop-loss point (if necessary)? Or how would I even just close the trade for that matter?

You can't set it up. You need to monitor the share price and when it gets to your stop loss price, you have to place a market order (if available on that platform) or a limit sell order at the bid, that's the lower of the two prices quoted.

Example: shares are trading at $10 now and you want to sell them if they fall to $9. There is nothing you can do right now if conditional orders are not available. You will need to look at the price regularly and when it falls to $9, that's when you enter your order.

If you log in to IG now, you can enter a sell order (obviously don't confirm!) and see what options are available. There will definitely be 'Limit' and maybe 'Market' as well. The difference is that a limit order is conditional upon the shares being available to trade (buy or sell) at that price. It's possible that only a few shares are available at that price, resulting in a partial fill.

But if you want to sell and nobody is willing to buy at $9 it might well end in tears and the share price just keeps falling. That's why I'm saying you need to 'cross the spread'. I'm not sure if that explains it.

Maybe I should shut up and let somebody better qualified than myself take over, or at least somebody who knows IG Markets. I know how it works but I'm probably not explaining it clearly.

 

[johntdrums]

Thanks, Habakkuk, for your efforts. I really do appreciate it!