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# What is a trailing stop order

A trailing stop order allows you to set a trailing amount or trailing ratio, by which the system can automatically calculate a stop loss trigger price according to the changes in the market price. It instructs the system to submit a buy or sell market order to close positions when the market price reaches a specified stop loss trigger price. A trailing stop order does not guarantee a specific execution price and its execution price may deviate significantly from its stop loss trigger price.

When placing a trailing stop order, you follow the "buy high and sell low" rule; that is, the trailing amount or trailing ratio needs to be greater than 0.

## 1. Example

If you submit a buy trailing stop order at a trailing ratio of 50% when the market price is 10, its initial stop loss trigger price will be 15. As the market price falls, the stop loss trigger price will also fall; when the market price rises, the stop loss trigger price will remain unchanged. When the stock price rises to or exceeds the stop loss trigger price, a buy market order will be triggered.

If, after the order is placed and before it is triggered, the stock price falls to a lowest 8, then the stop loss trigger price will be 12 (8 + 8 * 50%). When the stock price reaches 12 or more, the order will be automatically submitted to the clearing broker as a market order and filled at the market price (the fill price is not guaranteed).

### 1.2 Sell

Assume you submit a sell trailing stop order at a trailing amount of 5 when the market price is 20, and then its initial stop loss trigger price will be 15. As the market price rises, the stop loss trigger price will also rise; when the market price falls, the stop loss trigger price will remain unchanged. When the stock price falls to or below the stop loss trigger price, a sell market order will be triggered.

If, after the order is placed and before it is triggered, the stock price rise to a highest 30, then the stop loss trigger price will be 25 (30-5). When the stock price drops to 25 or below, the order will be automatically submitted to the clearing broker as a market order and filled at the market price (the fill price is not guaranteed).

## 2. When to place an order

At any time in the app.

## 3. Time in force

You can set the time in force of an order yourself. If the order is not fully filled within the entire period, it will be automatically cancelled by the system.

If an order fails due to risk control or other reasons during the execution process, it will be in the 「Failed」 status and the system will no longer submit it.

## 4. When an order will be triggered

If the condition is triggered during the permitted trading session you set when placing an order, the order will be triggered and the system will automatically submit it to the clearing broker.

If the condition is triggered beyond the permitted trading session you set when placing an order, the order will not be triggered. The system will not start to judge if the condition is triggered until the permitted trading session you set begins.

## 5. How the trigger price is calculated

● By amount

Initial Stop Loss Trigger Price = Initial Price + Trailing Amount

Stop Loss Trigger Price = Lowest Market Price After an Order Is Placed But Before It Is Triggered + Trailing Amount

● By ratio

Initial Stop Loss Trigger Price = Initial Price * (1 + Trailing Ratio)

Stop Loss Trigger Price = Lowest Market Price After an Order Is Placed But Before It Is Triggered * (1 + Trailing Ratio)

### 5.2 Sell

● By amount

Initial Stop Loss Trigger Price = Initial Price - Trailing Amount

Stop Loss Trigger Price = Highest Market Price After an Order Is Placed But Before It Is Triggered - Trailing Amount

● By ratio

Initial Stop Trigger Price = Initial Price * (1 - Trailing Ratio)

Stop Loss Trigger Price = Highest Market Price After an Order Is Placed But Before It Is Triggered * (1 - Trailing Ratio)

## 6. Explanations and Notes

6.1 Placement of the conditional order does not directly freeze the customer's buying power or position. It will be frozen only when the condition of the order is triggered. Please note that triggering of conditional order does not guarantee that the order will be successfully submitted to the upstream broker or the exchange. The conditional order will be failed to submit due to insufficient buying power or positions of the account at that time.

6.2 After an order is triggered, there is no guarantee that it will be filled. A trailing stop order is automatically submitted as a market order by the system only when the system detects that the trigger price is reached; after being triggered, the order will be processed in the same logic as an ordinary order is processed. If unmatched, the order will be automatically cancelled after the time in force expires.

6.3 Once triggered, the condition will not take effect again regardless of whether the corresponding order is filled or not; if necessary, please place a new order.

6.4 After an order is triggered, the system will help to submit a market order. However, in order to facilitate your order management, the status and data of the order that is triggered and submitted will still be displayed in the original trailing stop order.

6.5 After an order is triggered, the system will judge whether the order can be submitted to the clearing broker according to the maximum buying power in your account, and margin may be used.

6.6  A trailing stop order can be used only to close positions. If the order quantity is higher than your position in the underlying security when the condition is triggered, the order will not be executed.

6.7 A trailing stop order can be triggered only during regular trading sessions.

6.8 Advanced orders are simulated by Futu based on basic orders, and have nothing to do with the advanced order types provided by specific exchanges. Please refer to the corresponding order explanation page for specific order performance.