Create a Trailing Stop Order
A trailing stop sell order sets the initial stop price at a fixed amount below the market price. As the market price rises, the stop price rises by the trailing amount, but if the stock price falls, the stop price remains the same. When the stop price is hit, a market order is submitted. Reverse this for a buy trailing stop order. This strategy may allow an investor to limit the maximum possible loss without limiting possible gain.
NOTE: We do not recommend using trailing stop orders, as there is no guarantee that your order will be filled at or near the designated stop price, which is especially dangerous in rapidly rising or falling markets. In addition, trailing stop orders will accentuate volatility in rough markets.
To enter a trailing stop order
Click in the Ask Price to initiate a BUY order, or the Bid Price to initiate a SELL order.
Click in the Type field and select TRAIL.
Enter values in the following fields:
Aux Price (Trailing Amt) field. Use the dropdown to choose Amt or %. The trailing percent is calculated off the current best bid/ask.
Limit Price - this value defaults to the current best bid/ask. The limit price will move with the trailing stop price based on the delta between the two prices (initial stop price - initial limit price = limit delta). If the limit price and stop price are equivalent, they will move together with a zero delta.
Stop Price - This field is optional. By default, the workstation calculates the initial stop price using: market price - trailing amount. You can modify the stop price, but if it is lower than the calculated value, it will be discarded when the order is submitted. Note that the value you enter may display in the Stop Price field even if it is not used.
To transmit the order, click the red "T" in the Transmit field or the Transmit icon on the trading toolbar.
For a more detailed description of Trailing Stop orders and the products and exchanges on which they're supported, visit the Order Types information page.
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