Guide to Guaranteed Stop Losses
Clean Financial - The Financial Spread Betting Website
Guaranteed Stop Loss

Guaranteed Stop Loss


Financial Spreads are now offering Guaranteed Stop Loss orders on their platform.

Until now, clients had been able to speculate on the markets knowing that their trade was protected by a stop loss. A stop loss order will still be available, and is still automatically added to all spreads bets and CFDs with the company.

For added security, and like IG, CMC & ETX Capital, the spread betting company are also offering Guaranteed Stop Losses.


Quick Example of a Guaranteed Stop


As mentioned, the firm already provide stop losses, nevertheless normal stop losses don't guarantee the point where your trade will be closed if the marketplace gaps.

For instance, let's say that you purchase the FTSE at 6000, and you set your stop loss at 5980. If the UK index were to 'gap' and drop to 5970, then your trade would be closed at 5970, instead of at 5980.

This is simply because the index didn't trade at 5980, and as a result the firm didn't offer that prices level. The next price that was offered was 5970, and as a result your trade would be closed there instead.

Let's take the exact same example but rather than filing a normal stop loss order at 5980, you file a guaranteed stop loss order at the exact same level. If the market gapped again and dropped to 5970, your trade would be closed at 5980, as your stop loss was guaranteed.


The Extra Cost of Guaranteed Stops


Note that as Guaranteed Stops are a form of insurance against market gaps they come with a small additional price.

Firstly, there's a minor premium to pay for choosing a Stop to be guaranteed.

Secondly the Guaranteed Stop needs to be placed further away from your entry level than if it was a non-guaranteed Stop.


Guaranteed Stop Loss


Adam Jepsen, spokesperson for Financial Spreads, says that the new function will permit clients to trade with greater confidence. "We've been working hard and have a major new addition on our spread betting platform: guaranteed stop orders," he said.

"We take our customer feedback seriously and are extremely pleased to announce we are rolling these [guaranteed stop orders] out because of client demand.

"Guaranteed stop orders allow you to trade with complete confidence that you'll be protected against any market slippage or gaps by being filled at the level you've specified."


Guaranteed Stops FAQs


For more on Guaranteed including costs and when they are particularly useful, see FAQs on Risk Management and Guaranteed Stop orders.


Companies That Offer Guaranteed Stops Orders


The following spread betting companies firms let you apply Guaranteed Stops to most trades: This is not an inclusive list, other companies may also offer Trailing Stop orders.


Trading Risk Warning
'Guaranteed Stop Loss' edited by Jenna Cutly, updated 22-Feb-17

For related articles also see:




Free Financial Email Updates
Q) Average Trading Results?

A) Get free trading tips, offers, price updates, important news and more!
All Free - Click here!


Risk Warning

Home
City Index
ETX Capital
Financial Spreads
IG
Spread Betting News
Live Charts
Live Prices
Stock Market Spreads
Stock Market News
Stock Market Charts
Stock Market Prices
FTSE 100 Spreads
Dow Jones Spreads
DAX 30 Spreads
Forex Spreads
Forex News
Forex Charts
Forex Prices
EUR/USD Spreads
GBP/USD Spreads
Commodities Spreads
Commodities News
Commodities Charts
Commodities Prices
Gold Spreads
Crude Oil Spreads
Shares Spreads
Share Tips
Share Trading Reports
Share Charts
UK Shares
US Shares
Spread Betting
Bonds Spreads
Interest Rate Spreads
Spread Trading Blog
Financial Fixed Odds
CFD Trading
Trading Features
Trading Forum
Technical Trading
Free Newsletter
Why Spread Bet?
What's Spread Betting?
Trading Glossary