Need Help with STOPLOSS order types.

#1
Hi all,

According to my system requirement, SL should be strictly executed at Fixed price. So here's an example to help understand my query about SL order type in much detail.

Suppose I am LONG in GOLM @ 29390 and i want my SL(sell order) at 29366.
Current prices:
LTP: 29406
Bid: 29366
Ask:29405
So to implement this:
Scenario 1.
I use SL-M(market order) and input trigger price as 29366(which is the price at which i want to get out of my position).

Now my question is would the order get executed as soon as i enter it as there are buyers @29366(Current Bid price) inspite of the LTP which is 29406 on my chart? Or order would be executed based on LTP i.e. whenever LTP= my trigger price?

Scenario 2.
I use SL(limit order) and input trigger price as 29366 and limit price as 29300(as i want to give some room in case of wild price movement).

So would the order execute as soon as LTP=Trigger price or it would be just put in the market by my broker and would wait for my limit price to approach?


My intension is to get my SL executed at fixed price(i.e.when prices approach 29366 on charts.) but i also want to give some room in case of volatility and would be fine if it gets executed between the 29366-29300(66 points) range. So what would be the ideal scenario to use at such situation?

Thanks in advance.
Phantom.
 

zabeen2004

Well-Known Member
#2
SL orders are hidden orders and will not get executed unless the LTP reaches its value.
SLM orders will get executed if LTP reaches the defined value or any other value beyond it if it didn't touch the defined value. Whereas SL(limit order) has the risk that if LTP did not reach any of the value you set to limit losses then you will be in trouble.

It is always a good idea to use SLM instead SL which can save you in a ranging market.

The above information is only my own view based on my exp and it may differ from traders to traders.

Thanks
 
#3
SL orders are hidden orders and will not get executed unless the LTP reaches its value.
SLM orders will get executed if LTP reaches the defined value or any other value beyond it if it didn't touch the defined value. Whereas SL(limit order) has the risk that if LTP did not reach any of the value you set to limit losses then you will be in trouble.

It is always a good idea to use SLM instead SL which can save you in a ranging market.

The above information is only my own view based on my exp and it may differ from traders to traders.

Thanks
Thanks for your valuable insights zabeen. Got your point. But would it(SL-M) get executed based on LTP or Bid and Ask prices? As u can see in above example for scenario 1, the Bid price is equal to my trigger price. But LTP is way above Trigger price. So my question is by using SL-M in such scenario, will it get executed right through or it would be pending order till LTP= Trigger price irrespective of bid and ask price?

Thanks.
Phantom.
 

Giraffe

Well-Known Member
#4
You are a bit confused with the basics of stop loss order.
Trigger price and "Limit" Price that you will put will be different. I think you are getting confused between them.

For Stop Loss order:
There will be a trigger price and a "Limit" value at which you will exit (offcourse if you get a fill at that price).

For Stop Loss-Market order (SL-M):
There will only be a trigger price. When LTP touches trigger or falls below it, your order will be executed as market order.

In case 1, i.e. SL order, if market moves rapidly, you may not get a fill for your limit order and you might be left holding the position even if you have placed stop loss order.
 

Giraffe

Well-Known Member
#5
Thanks for your valuable insights zabeen. Got your point. But would it(SL-M) get executed based on LTP or Bid and Ask prices? As u can see in above example for scenario 1, the Bid price is equal to my trigger price. But LTP is way above Trigger price. So my question is by using SL-M in such scenario, will it get executed right through or it would be pending order till LTP= Trigger price irrespective of bid and ask price?

Thanks.
Phantom.
SL-M will be activated when LTP reaches your trigger point. When that happens, a normal buy/sell at "MARKET" order will be thrown. If that condition is not met, bid/ask values won't have any effect on your order. Only when LTP reaches trigger price, your orders will be send for execution.

If you are covering a long with a SL-M, you will get fill at best bid. If you are covering a short with SL-M, you will get fill at best ask.

Now, if you would have put a SL order (i.e. with a Limit price also), when triggered, it would place a limit order in the market and now you will be either on bid or ask side (depending on Long/short position) and you will have to wait for someone to fill your order at bid or lift your offer at ask.
 
#6
SL-M will be activated when LTP reaches your trigger point. When that happens, a normal buy/sell at "MARKET" order will be thrown. If that condition is not met, bid/ask values won't have any effect on your order. Only when LTP reaches trigger price, your orders will be send for execution.

If you are covering a long with a SL-M, you will get fill at best bid. If you are covering a short with SL-M, you will get fill at best ask.

Now, if you would have put a SL order (i.e. with a Limit price also), when triggered, it would place a limit order in the market and now you will be either on bid or ask side (depending on Long/short position) and you will have to wait for someone to fill your order at bid or lift your offer at ask.
Giraffe,

Thanks for a detailed explanation in this regards. Appreciate your help. You have cleared all my doubts regarding SL order types. So for my need SL-M suits best. :thumb:

Thanks.:)
Phantom.
 

Giraffe

Well-Known Member
#7
Hi all,

According to my system requirement, SL should be strictly executed at Fixed price. So here's an example to help understand my query about SL order type in much detail.

Suppose I am LONG in GOLM @ 29390 and i want my SL(sell order) at 29366.


So to implement this:
Scenario 1.
I use SL-M(market order) and input trigger price as 29366(which is the price at which i want to get out of my position).

Now my question is would the order get executed as soon as i enter it as there are buyers @29366(Current Bid price) inspite of the LTP which is 29406 on my chart? Or order would be executed based on LTP i.e. whenever LTP= my trigger price?

Scenario 2.
I use SL(limit order) and input trigger price as 29366 and limit price as 29300(as i want to give some room in case of wild price movement).

So would the order execute as soon as LTP=Trigger price or it would be just put in the market by my broker and would wait for my limit price to approach?


My intension is to get my SL executed at fixed price(i.e.when prices approach 29366 on charts.) but i also want to give some room in case of volatility and would be fine if it gets executed between the 29366-29300(66 points) range. So what would be the ideal scenario to use at such situation?

Thanks in advance.
Phantom.
Scenario 1:
When LTP touches your trigger price, then your order will be executed at current best bid at that time. There is no guarantee at what price you will exit in SL-M order. You will get the best bid at time of trigger of your order.
Current best bid won't have effect on your SL-M untill your LTP is above your trigger.

Scenario 2:
BE CAREFULL
Your limit price is way below the trigger price and current best bid.
Your order will be executed as a market order.
As soon as LTP touches 29366, a limit sell order will be send to main book to sell gold at 29300. But since current bid is already above 29300, you will get an immediate fill at 29366.
e.g. A woman handling her mother-in-laws trading account is very pissed off at her mother-in-law and decides to take revenge. She puts in a sell order for all the gold at Rs. 1 per 10g. She won't get the fill at Rs. 1 even if she wants. She will get the fill at best bid price. So she needs to find another way to take revenge.......:lol::lol:
 
#8
Scenario 1:
When LTP touches your trigger price, then your order will be executed at current best bid at that time. There is no guarantee at what price you will exit in SL-M order. You will get the best bid at time of trigger of your order.
Current best bid won't have effect on your SL-M untill your LTP is above your trigger.

Scenario 2:
BE CAREFULL
Your limit price is way below the trigger price and current best bid.
Your order will be executed as a market order.
As soon as LTP touches 29366, a limit sell order will be send to main book to sell gold at 29300. But since current bid is already above 29300, you will get an immediate fill at 29366.
e.g. A woman handling her mother-in-laws trading account is very pissed off at her mother-in-law and decides to take revenge. She puts in a sell order for all the gold at Rs. 1 per 10g. She won't get the fill at Rs. 1 even if she wants. She will get the fill at best bid price. So she needs to find another way to take revenge.......:lol::lol:
:rofl: A perfect example. :lol::lol:
Everything about SL order is Crystal Clear in my mind now. Thanks a ton Giraffe.:clap:

Phantom.
 

Relish

Well-Known Member
#9
Scenario 1:
When LTP touches your trigger price, then your order will be executed at current best bid at that time. There is no guarantee at what price you will exit in SL-M order. You will get the best bid at time of trigger of your order.
Current best bid won't have effect on your SL-M untill your LTP is above your trigger.

Scenario 2:
BE CAREFULL
Your limit price is way below the trigger price and current best bid.
Your order will be executed as a market order.
As soon as LTP touches 29366, a limit sell order will be send to main book to sell gold at 29300. But since current bid is already above 29300, you will get an immediate fill at 29366.
e.g. A woman handling her mother-in-laws trading account is very pissed off at her mother-in-law and decides to take revenge. She puts in a sell order for all the gold at Rs. 1 per 10g. She won't get the fill at Rs. 1 even if she wants. She will get the fill at best bid price. So she needs to find another way to take revenge.......:lol::lol:
SL-L order in yes bank. I put trigger price 330 and sell price at 326 and current stock price is 320. When stock price reaches @ 326 will it execute or it waits till 330 trigger price ?

My order got executed @326 stock price move upto 342 in that day.
 

Giraffe

Well-Known Member
#10
SL-L order in yes bank. I put trigger price 330 and sell price at 326 and current stock price is 320. When stock price reaches @ 326 will it execute or it waits till 330 trigger price ?

My order got executed @326 stock price move upto 342 in that day.
I am assuming it's a sell stop loss order. You already have a long position in yes bank.
Trigger Price=330
Current Price= 320
So trigger criteria is already met.
(Requisite for Sell SL order is Current price less than or equal to Trigger Price)

Your limit price is 326.
So your order got executed at 326.
 

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