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What is a “Guaranteed Stop Order”?
During certain market conditions (in a volatile market, for example) your Stop Loss Order might not be executed at your exact preferred rate (price). This feature will force the position to close at your chosen rate (price) even if the market price surpasses it. Once your stated level is reached, the position will automatically close. This feature is not available for all instruments, and a fee is charged via a wider spread.
Guaranteed Stop Order features:
- Can only be placed on a new position and cannot be added to an existing one.
- Can only be activated/edited during the instrument’s trading hours.
- Once the Guaranteed Stop Order is placed, it cannot be revoked, however the level can be changed.
- The wider spread charged when a Guaranteed Stop Order is placed is non-refundable once activated, and is visible prior to the placing of this type of Order.
- A Guaranteed Stop Order must be set within certain distances (minimum and maximum distance) from the current rate (price) of the instrument as shown on the trading platform.
To learn how the Guaranteed Stop works, please follow this example:
Alphabet’s Buy/Sell rates are $500/$498.
You buy 10 shares CFDs of Alphabet. Let’s say that the Guaranteed Stop Order wider spread is $10.
You place a Guaranteed Stop at the Sell rate of $450.
Alphabet’s Sell rate drops to $400 → the position will be closed at $450 and not at $400.
P&L with Guaranteed Stop: ($450 - $500)*10 - $10 = loss of $510.
P&L without Guaranteed stop: ($400 - $500)*10 = loss of $1000.
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