Stop Limit Rules for Stocks

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pdwst33

In reference to my small time brokerage account on Scottrade...

I've about had it with terrible executions with stop limit orders I have placed with Scottrade. Perhaps I'm misunderstanding the rules here and someone can clarify.

I have a stop limit order in to sell NTRI at 54.97...The stock trades at $55, at $54.99...back to $55 and then just trades higher on the day. I double, triple, quadruple checked the tape and it never traded at 54.97 much less any lower than that price. I'm executed at $54.99 and the stock closes higher, of course! I know how the business works...the order was probably routed to NITE and they "pretend" not to notice the stop LIMIT and execute the stock at a price favorable to them, trade out of it, and hope the customer doesn't call them on it since it's through an e-broker anyhow.

well I called Scottrade and stated my case (this is not the first time I had to prove them wrong) and they are "researching" it, after giving me some b.s. explanation about how on "Nasdaq" stocks, if the bid "hits" your stop limit is executed. I kept asking the guy what he meant by "hit." he didn't mean "hit" as in "traded" because the stock didn't trade at my stop limit price nor less than that...I expect them to cancel this trade in my favor, but plainly, I'm getting sick of this happening. Can anyone recommend a better broker that doesnt have this problem? Looking to trade stocks/options at economical commissions but with some fair level of service. Thanks
 
Quote from pdwst33:


well I called Scottrade and stated my case (this is not the first time I had to prove them wrong) and they are "researching" it, after giving me some b.s. explanation about how on "Nasdaq" stocks, if the bid "hits" your stop limit is executed. I kept asking the guy what he meant by "hit." he didn't mean "hit" as in "traded" because the stock didn't trade at my stop limit price nor less than that...I expect them to cancel this trade in my favor, but plainly, I'm getting sick of this happening. Can anyone recommend a better broker that doesnt have this problem? Looking to trade stocks/options at economical commissions but with some fair level of service. Thanks
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The problem is not with your broker. His explanation is correct. On the NYSE, a stop is triggered by the last price. No so on the NAZ, where stops can be triggered by bid or ask.
 
Why don't you take a look at InteractiveBrokers, where you have some choice in how your stop limit is triggered? You can choose from last, double last, bid/ask and so forth. I usually select double last for trading equities.
 
With the following brokers, you can make kind of simulated stop (or stop-limit) orders with activation by "last" even for Nazdaq stocks:
i) Ameritrade or AmeritradeIzone: with Trade Triggers.
ii) Just2trade: with Logical Orders.
iii) Interactive Brokers: by modifying the stop triggering method.

All of them can be cheaper than Scottrade too.
 
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