Stop Orders

A Stop order becomes a market order to buy or sell securities or commodities once the specified stop 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 of the security or commodity. It 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. Some exchanges natively accept and process Stop orders according to the standard industry definition of the term. For those exchanges that do not natively execute stop orders, IB simulates such stop orders with the following default triggers:

Sell Simulated Stop Orders become market orders when the last traded price is less than or equal to the stop price. Additional sell stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two offer prices are less than or equal to the stop price.

Buy Simulated Stop Orders become market orders when the last traded price is greater than or equal to the stop price. Additional buy stop order protection is provided for NASDAQ stocks and US Equity Options which are only triggered after two bid prices are greater than or equal to the stop price.

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 User's Guide for more information. For more information on how to create Stop orders, please refer to the TWS User's Guide.

You have purchased 100 shares of XYZ for $50.00/share. You want to limit possible loss on this stock, so you create a stop order to sell 100 shares of XYZ with the stop price set to $46.00. If the price of your stock falls to $46.00 or below, your stop order is activated and a sell market order for 100 shares XYZ is transmitted.

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 Cancelled.

Note: Any stock or option symbols displayed are for illustrative purposes only and are not intended to portray a recommendation.