Stop-loss Issues

[seawitch]

Hi all, I thought I’d give the stop loss a go today, setting it to significantly lower than the share price (but at a price I was still happy with).

Immediately the app then sold the shares for significantly lower than my stop loss, with the share not even hitting close to that low. I thought i’d better give a warning as this is something I’ve never experienced with other trading platforms and was a bit of a jolt (and left me out of pocket of about £100!).

Edit: If it was me being thick or just “is what it is” then that’s fine, but it was just a bit of a “whoa” moment, especially with the shares now sitting comfortably and smugly above my stop loss

[AJHY]

What was the stock and time? Happy to check the price action on a Bloomberg terminal.

[seawitch]

Yes please - I think perhaps it did have a massive dip. I just wish the order limiter would buy at those prices, rather than always benefit the negative

UFO at around 10am.

[Eden (E)]

You should be able to check, the price was down to 1.167p today (buy price I believe) and seems to have dropped to its lowest at around 10.04 at 1.12p and sell price is currently 1.15 and buy is currently 1.25

If the 1.12 was you (the first one), might be worth a message to Freetrade just to make sure it actually worked as expected as I wouldn’t have expected it to sell if you were the first since there was no loss, unless you’re trigger was just under 1.20 then it would have sold at the next best available price.

[seawitch]

Ah that makes sense. Thank you Eden.The 10:05:19 looks to be me. Yay.

[seawitch]

Memo to me: STOP TOUCHING THE SHARES.

[Eden (E)]

I’ve made this mistake.

At the very least I think a lot of the aim shares can be far more volatile in price, I expect they probably need a far wider stop loss if you plan to set one.

[seawitch]

I’m annoyed at myself. Oh well, it could have been a lot worse. Hopefully I can get back in and then forbid myself from touching them, they were ones that were going to buy me that Porsche one day (girl can dream!)

[sampoullain (Sam)]

Hey @seawitch, glad that has been resolved — thanks @Eden as always for the help

Unrelated, but whenever anyone mentions Porsche I can’t help but recommend this amazing short documentary on vintage Porsche!

I can’t help but geek out on those 911s

Urban Outlaw - Rebel Porsche Customizer

[AndrewJ (Andrew)]

I had a very similar one this week, equally annoying and my test of stop-losses didn’t go great! Is there any chance you could take a look at one for me too? It was Social Capital III (IPOC) on 4th Jan sold at $14.17 - need to rethink how (/if) I use them again

[J4ipod94]

This is where a STOP LIMIT order type could put your mind at ease although setting the limit price would be tricky.

Plus: Stop Limit Order Type

I don’t think an Idea topic has been made for this but I’ve seen Help and Chat topics/posts asking for this feature. A stop limit order is a combination of a stop order and a limit order. With a stop limit order, after a certain stop price is reached, the order turns into a limit order, and an asset is bought or sold at a certain price or better. These types of orders are ideal for traders and investors who prefer to make trades that have components of both stop orders and limit orders. A stop…

[seawitch]

Yes - a STOP LIMIT would be much better and if it couldn’t sell then don’t sell (and I’d hang on to them). It feels I’ve been kicked out of the game very low now, which is such a pain

[the_czar]

As a rule stop losses are bad. Know what you hold. Video below will provide context.

How Market Makers Stop You Out | 2020

[RVtech]

I had the same thing with UFO a few months ago. Was moving my stop loss up but inadvertently sold when I wasn’t expecting. More my fault than FT but I haven’t really used them since…!

With volatile ‘penny’ shares better to have the stop loss more as a pure emergency stop loss rather than at a price anywhere close to the current price. I think I am more comfortable to cash out on my own terms.

[seawitch]

I’m glad it isn’t just me! All a learning experience and could have been much worse, I suppose. I’ll keep an eye on them and forbid myself from messing about. I wasn’t expecting a sell at 1.12 after setting the loss at 1.2!

[Eden (E)]

@seawitch

I wasn’t expecting a sell at 1.12 after setting the loss at 1.2!

Ah, worth having a look over the execution policy

Once the order has triggered, it is not possible to cancel.Buy Limit Orders and Sell Limit Orders will only execute at or better than the Limit Price set by you.

Stop Loss Orders will not necessarily execute at the Stop Price set by you and will often execute at a lower price, due to the inherent nature of moving markets and the price at which our market counterparties or other market participants available to us are willing to buy at that time.If the observed market price reaches the Limit Price or Stop Price you set, it will not always mean that your order will be executed, for example, due to differences between price data and the prices at which our market counterparties or other market participants available to us are willing to buy or sell.

You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Limit or Stop Loss Order types, save any assessment made by us that we have fallen short of our best execution obligations.
‍
Your order, regardless of type, will only be carried out if all of the required shares are available to be purchased in the market, i.e. your order will never be partially filled. This is known as ‘Fill or Kill’. Catchy name.

I’ve a thread about the boring documents Seriously, Read the Execution Policy and the T&Cs

[Rorydinho]

I’ve had similar issues with a limit order this morning - this sort of clarifies it.

The stock I was looking at is now over 12% up - despite the price hitting my limit.

Frustrating.