Stop Order is an order to buy or sell when the price moves past a predefined threshold, also known as the Stop Price. Once it is crossed, a Stop Order becomes a Market Order. Stop Order is an order which, when accepted, does not immediately go on the book, but must be “triggered” to be activated.
The trigger is a trade that occurs at a price, specified by the order - the trigger price. Once a trade occurs at the trigger price, the order is activated. At this moment, the order enters the matching engine like a regular order; namely, it can be a market order, or limit order and is processed accordingly.
Stop Orders can be used for two purposes: to enter and increase the position following a trend, or to exit and decrease a position when the price moves against. The latter is used more frequently, therefore Stop Orders are also informally called Stop Loss Orders. Also, this is why Stop Market Orders are used more regularly than Stop Limit Orders.
Stop Orders are generally smaller than others because they are usually used by traders with smaller funds, who want to protect their position but cannot watch the market 24/7 and do not have automatic trading systems that would do it for them.
- Buy Stop is an order to buy at the next available Ask Price when the last trade price reaches the Stop Price.
- Sell Stop is an order to sell at the next available Bid Price when the bid decreased to the Stop Price.
Stop Order can be placed as either a Stop Market or a Stop Limit.
- Stop Market Order becomes a Market Order once the stop trigger price is reached.
- Stop Limit Order becomes a limit order once the stop price is reached.
To choose between the two stop order types, set the stop order type on the Trading Configuration Panel to either MKT for a stop market order or LMT for a stop-limit order. When using a stop-limit order, set the stop order offset to indicate the limit price.
NOTE: The offset can also be negative. A negative offset means that once the stop trigger is met the limit order is below the trigger price (for buy stop) or above the stop trigger price (for sell stop).
Bracket Order is an order where one can enter a new position along with a target/exit and a stop-loss order. As soon as the main order is executed, the system will place two more orders (profit-taking and stop-loss). When one of the two orders (profit taking or stop loss) gets executed, the other order will get cancelled automatically.
To send bracket orders, users need to check the Brackets check box on the Trading Configuration Panel and check the type of orders to send as brackets and their distance in ticks from the executed price of the leading order. Bracket orders can be either or both of taking profit limit orders and stop orders.
Note that bracket orders will be sent for every filled order that was placed when the Brackets check box was already checked.
The duration and type of the stop-limit bracket order will be as was set for any stop order when the leading order was sent to the market. The duration of the take profit limit order will be the same as was set for any limit order when the leading order was sent to the market.
Once triggered, the bracket orders will function as OCO orders. The price of each OCO leg can be changed individually. When one leg is cancelled, the other leg will be cancelled as well. Size modification of a single leg may or may not result in a similar change of the other OCO leg, depending on the platform to which Bookmap is connected. See Special Orders for details.
Note that size can only be modified downwards; i.e., you can only reduce the size of the order but not increase it.
For some of the platforms and APIs supported by Bookmap, the bracket orders are server-side;, i.e., the instruction to send a bracket order following the execution of the leading order is not stored internally in Bookmap but on the broker/execution platform side. At the same time, some other platforms and APIs do not support server-side bracketing, in which case the bracket orders will be client-side, i.e., kept in Bookmap until sent to the market. Whether bracket orders are a server or client-side has implications on the submission of orders when Bookmap becomes unavailable due to loss of connection, involuntary or voluntary shutdown, system crash, or any other reason. When bracket orders are kept on the client-side, they will be lost when Bookmap becomes unavailable and will not be sent to the market when the triggering condition has been met. Traders’ caution and discretion is advised when using client-side bracket orders.
See Special Orders for details on which platforms / APIs support server-side brackets. When working with other platforms / APIs the brackets will be client-side.
When OCO check box is checked, traders can enter two linked orders that will cancel each other when filled. Once the trader designates the first OCO leg price the trader will be guided to designate the second OCO leg price. Only when both OCO legs have been designated will both OCO orders be sent.
The price of each OCO leg can be changed individually. When one leg is cancelled the other leg will be cancelled as well. Size modification of a single leg may or may not result in a similar change of the other OCO leg, depending on the platform to which Bookmap is connected.
See Special Orders for details. Note that size can only be modified downwards; i.e., the user can only reduce the size of the order but not increase it.
Trailing Stop Order is a stop order that tracks the price of an investment vehicle as it moves in one direction, but the order will not move in the opposite direction.
For Trailing Ttops, check the Trailing Stop check-box on the Trading Configuration Panel. A trailing stop will be entered for every Stop Order that is placed while the Trailing Stop check-box is checked. The trailing parameter controls the steps at which the stop order is updated and is measured in tick distance.
NOTE: Stop Orders placed to open a position will not be affected by Trailing Stops.
For some of the platforms and APIs supported by Bookmap, the trailing stop is server side, i.e. the trailing stop instructions are not stored internally in Bookmap but on the broker / execution platform side. At the same time, some other platforms and APIs do not support server side trailing stop, in which case the bracket orders will be client side, i.e. kept in Bookmap. Whether Trailing Stop is server or client side has implications on the trailing stop availability when Bookmap becomes unavailable due to loss of connection, involuntary or voluntary shutdown, system crush or any other reason. When Trailing Stop is kept on the client side, it will be lost when Bookmap becomes unavailable. Traders' caution and discretion is advised when using client side trailing.
See Special Orders for details on which platform / API supports server side trailing