Stop-Loss Orders

A stop-loss order can help you limit your losses. If the market price reaches or crosses through the Stop price, your order is sent to the exchange as a market order.

Example:

  • Sell Stop-Loss: When you place a Sell Stop-Loss order, you create a "floor" for your position. Let's say you have a security that is trading at $50 and you'd like to sell it if the price reaches $48.00. You can place a Stop-Loss order and enter a Stop Price of $48.00. If the security reaches $48, the order triggers and becomes a market order. You'll get the current price available for the security under the prevailing market conditions.
  • Buy Stop-Loss (This order type is only available for closing covered calls): When you place a Buy Stop-Loss order, you create a "ceiling" for your position. Let's say you have an option contract that is trading at $2.00 per contract and you'd like to Buy to Close if the price reaches $2.10. You can place a Stop-Loss order and enter a Stop Price of $2.10. If the contract price reaches $2.10, the order triggers and becomes a market order. You'll get the current price available for the security under the prevailing market conditions.

Criteria:

  • Sell Orders: The Stop Price must be entered at least $0.01 below the current Bid Price.
  • Buy Orders: The Stop Price must be entered at least $0.01 above the current Ask Price.