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Stop Orders
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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. |
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You have purchased 100 shares of XYZ for $30.00/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 $28.00. To do this, first make sure that the Stop price column is displayed on the trading screen. Then create a SELL order and select STP in the Type field to specify a stop order. Next, enter the stop price (28.00) in the Stop Price field, then submit the order. If the price of your stock falls to $28.00 or below, your stop order is activated and a sell market order for 100 shares XYZ is transmitted.
Some destinations natively accept and process Stop orders according to the standard industry definition of the term. For those destinations 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 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.
Any stock or option symbols displayed are for illustrative purposes only and are not intended to portray a recommendation.
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.