Stop Limit Orders - please clarify

N

nourozi

I'm not exactly sure how stop limit orders work. It would be great if someone could clarify a few things for me in relation to the linked example: http://postimg.org/image/fx6wsxwxj

1) If I placed a sell stop limit order at 151.00 with an offset of 2 ticks, does this mean I could have been filled anywhere from 151.00 - 150.98?

2) If I had gotten filled at 150.98, does this mean I would have been instantly down 2 ticks in P/L because my trigger price was at 151.00? Or would I have been at break even at the time of fill? Essentially, do I have to pay for the ticks between my trigger price and my fill price?

3) Are stop limit orders placed in a queue at the exchange like normal limit orders? As in, the further away from the market I place my stop limit order, the faster it will be filled once triggered?

4) Assuming I am usually placing my stop limit orders 3 ticks above/below the current market price, am I likely to get my trigger price (151.00 in the example) on a market like 6e using only 2 contracts?

Thanks!
 
Quote from nourozi:

Thank you for your enlightening comment but I have not found the answers to my questions by using Google.
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2nd result,investopedia, you can't be that stupid?




1) If I placed a sell stop limit order at 151.00 with an offset of 2 ticks, does this mean I could have been filled anywhere from 151.00 - 150.98?

Yes


2) If I had gotten filled at 150.98, does this mean I would have been instantly down 2 ticks in P/L because my trigger price was at 151.00? Or would I have been at break even at the time of fill? Essentially, do I have to pay for the ticks between my trigger price and my fill price?

No. You got a better price. ie. you were filled at 150.98.. why would you be down 2 ticks?

3) Are stop limit orders placed in a queue at the exchange like normal limit orders? As in, the further away from the market I place my stop limit order, the faster it will be filled once triggered?

stop-limit is a stop first and a limit after trigger. if market trades your stop-limit price, your stop, instead of buying/selling at market, becomes a limit order (ie. someone has to hit or lift you). The stop order is not in queue, but the limit is.

4) Assuming I am usually placing my stop limit orders 3 ticks above/below the current market price, am I likely to get my trigger price (151.00 in the example) on a market like 6e using only 2 contracts?

You are likely not to get filled in a fast moving market because you would need to be hit/lifted or get a partial fill
 
Quote from Eyez:

2nd result,investopedia, you can't be that stupid?




1) If I placed a sell stop limit order at 151.00 with an offset of 2 ticks, does this mean I could have been filled anywhere from 151.00 - 150.98?

Yes


2) If I had gotten filled at 150.98, does this mean I would have been instantly down 2 ticks in P/L because my trigger price was at 151.00? Or would I have been at break even at the time of fill? Essentially, do I have to pay for the ticks between my trigger price and my fill price?

No. You got a better price. ie. you were filled at 150.98.. why would you be down 2 ticks?

3) Are stop limit orders placed in a queue at the exchange like normal limit orders? As in, the further away from the market I place my stop limit order, the faster it will be filled once triggered?

stop-limit is a stop first and a limit after trigger. if market trades your stop-limit price, your stop, instead of buying/selling at market, becomes a limit order (ie. someone has to hit or lift you). The stop order is not in queue, but the limit is.

4) Assuming I am usually placing my stop limit orders 3 ticks above/below the current market price, am I likely to get my trigger price (151.00 in the example) on a market like 6e using only 2 contracts?

You are likely not to get filled in a fast moving market because you would need to be hit/lifted or get a partial fill
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I was wondering if you would be down 2 ticks in profit because with a market order, you always pay the spread which is at least 1 tick (more with slippage). Do you not have to pay the spread with a stop-limit?
 
Quote from nourozi:

I was wondering if you would be down 2 ticks in profit because with a market order, you always pay the spread which is at least 1 tick (more with slippage). Do you not have to pay the spread with a stop-limit?
More...


You're only paying the 'spread' when you go market.. with a limit order you are waiting for someone else to lift/hit you
 
Quote from Eyez:

You're only paying the 'spread' when you go market.. with a limit order you are waiting for someone else to lift/hit you
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Ok, thanks, not sure why anyone would want to use a market order... why not just use a stop-limit with a large offset?
 
Quote from Eyez:

You're only paying the 'spread' when you go market.. with a limit order you are waiting for someone else to lift/hit you
More...

Well, I tried it live today on the 6b and I did in fact pay the spread with a stop-limit order as I thought.

My sell stop-limit order was at 150.61

Market filled me a tick below at 150.60 and I had to pay the difference between my trigger price and the price I was filled at which was 1 tick...
 
Quote from nourozi:

Well, I tried it live today on the 6b and I did in fact pay the spread with a stop-limit order as I thought.

My sell stop-limit order was at 150.61

Market filled me a tick below at 150.60 and I had to pay the difference between my trigger price and the price I was filled at which was 1 tick...
More...


Any type of limit order should fill you at EXACTLY the order price or better. Not worse. This is just a guess, but the reason it might appear as you explained is that some brokers include the cost of the transaction in the sell or buy price, so that it only appears that you got a different price than you actually did. Add the cost of a trade to this transaction and let us know if the math works.
 
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