Stop Order Not Honored

[vincentnyc]

I'm sure it is not the case. There is NEVER a guarantee on a stop but you state "next day" above. That is not a stop market. A stop market is to execute immediately when a trigger is hit. Brokers have obligations not to move the market. If the stock's last trade was $19 and bids disappear to $5 bid, TD would have some serious explaining to do if they allowed the market to move down 73% on one small trade. Read their terms. I'd be willing to bet they do not say guarantee and include something to the tune of "best efforts".

In regards to the OP's question. We are sitting here speculating on large gaps and other extreme situations when we have not seen details of the placement of the order, the trigger, the stock, the time, etc. IB's last metrics show 1.76 million DARTs per day in October. They must have thousands of stops per day and the OP seems to be a rarity stating his stop order wasn't honored. I thus think it is reasonable to jump to the conclusion this is operator error. I could be wrong but without knowing the exact details on how the order was submitted we may never know.

when i place a stop market order. I put the duration "good till canceled." For TD ameritrade, the default is 90 days. So my stop market sell order will execute no matter what for the next 90 days when the price either hit the market price or below.

 

[rb7]

I'm sure it is not the case. There is NEVER a guarantee on a stop but you state "next day" above. That is not a stop market. A stop market is to execute immediately when a trigger is hit. Brokers have obligations not to move the market. If the stock's last trade was $19 and bids disappear to $5 bid, TD would have some serious explaining to do if they allowed the market to move down 73% on one small trade. Read their terms. I'd be willing to bet they do not say guarantee and include something to the tune of "best efforts".

Orders, once submitted to exchanges, are not managed anymore by the brokers.
If a Stop Order is sent to an exchange, what happens to that order is no longer the broker responsibility. When a Stop Order get triggered, the broker has no control on the price it get filled. So yes, if the stop trigger price is 19$ it can get filled at 5$. But chances are, the exchange, depending of the situation and the reason why the price went down to 5$, may call for the obvious error rule.

 

[vincentnyc]

Orders, once submitted to exchanges, are not managed anymore by the brokers.
If a Stop Order is sent to an exchange, what happens to that order is no longer the broker responsibility. When a Stop Order get triggered, the broker has no control on the price it get filled. So yes, if the stop trigger price is 19$ it can get filled at 5$. But chances are, the exchange, depending of the situation and the reason why the price went down to 5$, may call for the obvious error rule.

or no error at all. I’ve seen plenty of stocks that gap down big due to some bad news or something. So the stop market order work like it is intended but not the desire price you want.

 

[MarkBrown]

My Td Ameritrade has an order called “stop market.” That’s guarantee to fill base on a price you put in even on a gap up or gap down. For example let say you put on a sell stop market order for a stock xyz @ $19 and the next day it gap down to $15. It will fill it at $15

Wrong - Logic think - did you not read above what @Bad_Badness said. You are living in a false sense of security and obviously were not long during 911 or you would have known better.

In the depth of all that paperwork you signed with TD it states the opposite that you will never be guaranteed on any fill.

 

[vincentnyc]

Wrong - Logic think - did you not read above what @Bad_Badness said. You are living in a false sense of security and obviously were not long during 911 or you would have known better.

In the depth of all that paperwork you signed with TD it states the opposite that you will never be guaranteed on any fill.

So you are saying I put a sell “stop market” order for $19 for good till canceled and the current price is $20 at the closing. the next day, it gap down way below $19. So it won’t get filled? And if it won’t get filled, can you answer why?

 

[eastern_warrior]

Orders, once submitted to exchanges, are not managed anymore by the brokers.
If a Stop Order is sent to an exchange, what happens to that order is no longer the broker responsibility. When a Stop Order get triggered, the broker has no control on the price it get filled. So yes, if the stop trigger price is 19$ it can get filled at 5$. But chances are, the exchange, depending of the situation and the reason why the price went down to 5$, may call for the obvious error rule.

Not quite. You are assuming the exchange has a native market or native stop order. If non native the broker must submit a limit price. Of course with TD they are selling your flow so it doesn’t go to an exchange and you’re setting yourself up for a garbage fill but that’s a story for another day.

 

[eastern_warrior]

So you are saying I put a sell “stop market” order for $19 for good till canceled and the current price is $20 at the closing. the next day, it gap down way below $19. So it won’t get filled? And if it won’t get filled, can you answer why?

Don’t confuse GTC and stops. While the vast vast vast majority of stops will get filled, there are circumstances they won’t.

 

[rb7]

Not quite. You are assuming the exchange has a native market or native stop order. If non native the broker must submit a limit price. Of course with TD they are selling your flow so it doesn’t go to an exchange and you’re setting yourself up for a garbage fill but that’s a story for another day.

Yes, you're right. I was assuming that, without knowing if this is the case with the OP's situation.

 

[vincentnyc]

Don’t confuse GTC and stops. While the vast vast vast majority of stops will get filled, there are circumstances they won’t.

I’m not confused about GTC or stops. I know what they are. Please elaborate on circumstances why they won’t get filled?

 

[MarkBrown]

So you are saying I put a sell “stop market” order for $19 for good till canceled and the current price is $20 at the closing. the next day, it gap down way below $19. So it won’t get filled? And if it won’t get filled, can you answer why?

ok lazy here it is - NO ONE HAS TO GIVE YOU A FILL. EVER are you an millennial?