Trailing Stop Loss Orders

Simple Trailing Stop Order

Trailing Stop Orders are a good way for your stop loss order to track the stock price (say 5% Below current stock price is where you want to sell).

What confused me was that there was a STOP price text field and a LIMIT price text field, in addition to the Quantity text Field.

The STOP price is where the sell is triggered – but not necessarily filled. The LIMIT price is where the stock is actually SOLD.

So say you want to sell 100 shares (quantity) with a STOP PRICE of 3 and a LIMIT price of 2.9. The actual price at which it will be sold will be 2.9

Trailing Stop Limit Order

This has two additional fields called ‘Trailing’ and ‘Limit Offset’

E.g. Stock Price $3

Trailing Stop  $0.1

Limit Offset $0.05

The trailing is when the stop loss order is ACTIVATED (but not filled). In our example, at 2.9, the stop loss order will be activated. However, if it falls below 2.85 (the limit offset), then NO ACTION WILL BE TAKEN.

What you are saying is – if it falls below 2.9, I wanna sell it – UNLESS, it falls below 2.85. THEN, I want to keep holding it.