Stop market order

1. Definition

A stop order is an instruction to submit a buy or sell market order when the client-specified stop trigger price is hit. A stop order is not guaranteed a specific execution price and may execute at a price significantly away from its stop price. Take a buy order as an example:

Assume the market bid and ask prices of EURUSD are 1.02050 and 1.02060 respectively. You can place a stop order by setting a price higher than the current ask price of 1.02060 as the trigger price (e.g., 1.02080). When the market ask price rises to 1.02080, the stop order will be triggered, and a market order will be submitted to the liquidity provider and filled at the market price (the transaction price is not guaranteed).


2. Explanations and Notes

2.1 In the hedging mode, stop orders can only be used to open positions.

2.2 Placement of the 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 liquidity providers. The conditional order will be failed to submit due to insufficient buying power or positions of the account at that time.

2.3 Even if a stop order is triggered, there is no guarantee that the market order so submitted will be filled. A stop order only instructs the system to submit a market order automatically when the trigger price is hit; the market order so submitted will be processed in the same logic as an ordinary order is processed. If the order is not filled during its time in force, it will be cancelled automatically by the system after expiration.

2.4 After a stop order is triggered, the system will submit a market order. For clients' convenience, the order details will be displayed in the original stop order.

2.5 On the sell side: The trigger price should not be higher than the best bid price.

2.6 On the buy side: The trigger price should not be lower than the best ask price.