A Stop order is an instruction to submit a buy or sell market order if and when the user-specified stop trigger price is attained or penetrated. A Stop order is not guaranteed a specific execution price and may execute significantly away from its stop price. A Sell Stop order is always placed below the current market price and is typically used to limit a loss or protect a profit on a long stock position. A Buy Stop order is always placed above the current market price. It is typically used to limit a loss or help protect a profit on a short sale.
Interactive Brokers may simulate certain order types on its books and submit the order to the exchange when it becomes marketable. The IB website contains a page with exchange listings. The linked page for each exchange contains an expandable "Order Types" section, listing the order types submitted using that exchange's native order type and the order types that are simulated by IB for that exchange. See our Exchange Listings.
Note:
The Reference Table at the top of the page provides a general summary of the order type characteristics. The checked features are applicable in some combination, but do not necessarily work in conjunction with all other checked features. For example, if Options and Stocks, US and Non-US, and Smart and Directed are all checked, it does not follow that all US and Non-US Smart and direct-routed stocks support the order type. It may be the case that only Smart-routed US Stocks, direct-routed Non-US stocks and Smart-routed US Options are supported.
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You're long 500 shares of XYZ stock at an Average Price of 14.96 (your entry price). You want to sell those 500 shares but you want to limit your loss to $250.00, so you create a Stop order with a Stop Price of 14.46. If the price of XYZ falls to 14.46, a market order to sell 500 shares will be triggered at that price. |
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The price of XYZ begins to fall from 14.93. If it touches your Stop Price of 14.46, a market order to sell 500 shares will be submitted. |
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The price of XYZ continues to fall and touches your Stop Price of 14.46. A market order to sell 500 shares is immediately submitted and filled at 14.46 per share. By using a Stop Sell order, you have limited your loss to $250.00. |
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Notes:
IB may simulate stop orders with the following default triggers:
For US equity and options markets, stop orders will only be elected by prices posted during normal NYSE trading hours (9:30 a.m. to 4 p.m. New York Time, Monday to Friday). In addition for NYSE listed stock IB SmartRouted stop orders, the order will not be elected until the NYSE displays a BBO.
For US futures and futures option markets, native stop and stop limit orders must be configured to "Allow stop triggering outside of regular trading hours" to be eligible to elect outside of 9:30 am to 4 pm New York Time. Stop orders on ECBOT and NYMEX configured to trigger outside of regular trading hours with a trigger method set to Bid/Ask may trigger based on pre-opening quotes.
Custom Stop order triggers may also be specified to override the default triggers. See the Trigger Method topic in the TWS Users' Guide for more information.
For special notes and details on U.S. Futures Stop and Stop-limit orders, click here. Native stop orders sent to IDEM are only filled up to the quantity available at the exchange. Any unfilled stop order quantity will be Canceled.
IB may simulate market orders on exchanges. For details on market order handling using simulated orders, click here.
Any stock or option symbols displayed are for illustrative purposes only and are not intended to portray a recommendation.
