What is a Stop Order?

There are two types of Stop Orders:

A Buy Stop Order would be used when the target price is higher than the current market price. The order will be executed at that price or higher.

Example:

• TSLA is trading at $1,000 and rising. So you place a maximum on the amount you will buy the stock at, such as $1,050. If it reaches this maximum amount, we will execute the Buy Stop Order
• There are 2 options to select from in terms of when the order would expire if the target price is not reached:
  • At the end of trading on the next US business day
  • When the customer chooses to cancel

A Sell Stop Order would be used when the target price is lower than the current market price. The order will be executed at that price or lower.

Example:

• TSLA is trading at $1,000 and falling, so you decide to place a floor on the price you will sell at, $950. If the market drops to this price, we will execute the Sell Stop Order
• There are 2 options to select from in terms of when the order would expire if the target price is not reached:
  • At the end of trading on the next US business day
  • When the customer chooses to cancel