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. If you wish to set a stop-loss, you must place a stop-sell order.
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
Note:
- Stop orders are not available for crypto. They are only available for stocks and ETFs.
- Stop orders can not be placed on fractional shares.