A trailing stop order allows investors to set a "trailing amount" or "trailing ratio" so that the system continually calculates the stop price as the market fluctuates. When the stop price is hit, a buy/sell market order will be submitted. A stop order is not guaranteed a specific execution price and may execute significantly away from its stop price.
The order follows the "buy high and sell low" guideline. The trailing amount or ratio should be greater than 0.
● Buy trailing stop order
Assuming stock XYZ has a current price of 10, you submit a buy trailing stop order with a 50% trailing ratio. So, the order's initial stop price will be 15 (10+10*50%). When the market price falls, so does the stop price; when the market price rises, the stop price doesn't change. A buy market order will be submitted as soon as the stop price is hit.
Before the buy order fills, if XYZ's market price falls to as low as 8, the stop price will be adjusted to 12 (8+8*50%). When XYZ's market price rises to 12, a buy market order will be submitted automatically to the clearing broker and should be filled at the market price.
● Sell trailing stop order
Assuming stock XYZ has a current price of 20, you submit a sell trailing stop order with a 5 dollar trailing amount. So, the order's initial stop price will be 15 (20-5). When the market price rises, so does the stop price; when the market price falls, the stop price doesn't change. A sell market order will be submitted as soon as the stop price is hit.
Before the sell order fills, if XYZ's market price rises to as high as 30, the stop price will be adjusted to 25 (30-5). When the price falls to 25 or lower, a sell market order will be submitted automatically to the clearing broker and should be filled at the market price.
Clients can place orders at any time via the app.
Clients can set the order's Time-in-force. If the order is not filled in full, the unfilled portion will be canceled automatically by the system. If the order fails to be executed due to risk management or other reasons, the order status will update to "failed," and the system will not continue to place the order.
Trailing stop orders will only be executed during the regular market session, which runs from 9:30 a.m. to 4:00 p.m. ET. They will not activate or be routed for execution during extended-hours sessions, such as pre-market or after-hours trading, or when the stock market is not open (e.g., during stock halts, market holidays, or on weekends).
A. If the trailing amount is set,
Initial stop price = initial market price + trailing amount
Adjusted stop price = the best price of a stock before triggering a market order + trailing amount
B. If the trailing ratio is set,
Initial stop price = initial market price * (1 + trailing ratio)
Adjusted stop price = the best price of a stock before triggering a market order * (1 + trailing ratio)
A. If the trailing amount is set,
Initial stop price = initial market price - trailing amount
Adjusted stop price = the best price of a stock before triggering a market order - trailing amount
B. If the trailing ratio is set,
Initial stop price = initial market price * (1 - trailing ratio)
Adjusted stop price = the best price of a stock before triggering a market order * (1 - trailing ratio)
6.1 After the trailing stop order is triggered, there is no guarantee that the order will be successfully placed. Reasons such as insufficient buying power and positions will cause a failure to place the order.
6.2 After the trailing stop order is triggered, the system will place a market order automatically as soon as the stop price is hit. However, there is no guarantee that the order will be filled. If the order is not filled during the Time-in-force, it will be canceled automatically by the system.
6.3 After the trailing stop order is triggered, whether it is filled or not, the trigger conditions will not be effective again. Please place a new order if necessary.
6.4 After the trailing stop order is triggered, the system will place a market order. For clients' convenience, the order details will be displayed in the original trailing stop order.
6.5 After the trailing stop order is triggered, the system will submit the order only when the client has enough maximum buying power on the account, and financing may be applied.
6.6 Trailing stop orders are only accepted if they close open positions. If the order quantity is greater than the current position, the order will not be executed.
6.7 The trailing stop order will only be triggered during regular trading hours.