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Stoploss

"Stoploss" type intelligent orders allow orders to be automatically activated once a pre-defined price, known as the "Stop Price (CZK)", is reached. Stoploss orders are primarily used to limit investment risks.

There are two basic uses for Stoploss orders, depending on the direction of the order:

  • Sell: sell specific shares if the reference price drops to a pre-defined value.
  • Buy: buy starting at a pre-defined reference price (reaching the specific value is considered a sign of growth.

Types of Stoploss orders

Stoploss Market

Once the stop price is reached (or if the stop price is exceeded for a buy order or drops below the stop price for a sell order), the Stoploss order is automatically added to the book of orders as a market order and can be immediately paired.

Stoploss Limit

Once the stop price is reached (or if the stop price is exceeded for a buy order or drops below the stop price for a sell order), the Stoploss order is automatically added to the book of orders as a limit order and can be immediately paired. The order must contain a limit price "Price (CZK)".

"Stop Price (CZK)" must be lower than the current price for the security at the time issued for a sell Stoploss order. "Stop Price (CZK)" must be higher than the current price for the security at the time issued for a buy Stoploss order. A Stoploss order receives a new timestamp when activated (reference price reaches the Stop price).

Example:

An investor purchases a stock at CZK 100. The current reference price is CZK 120 (profit of 20%) The investor's objective is to protect 15% of the created profit (CZK 15 per share) but also wants to hold the stock to take advantage of any potential increase in the stock price.

The investor can achieve this objective by submitting a "Stoploss" order by filling in the "Stop Price (CZK)" parameter. The stop price in this case would be set to CZK 115. If the stock's price falls to CZK 115 or below during the valid period for the order, the order is activated and sold. If the price continues to increase to CZK 150, the investor can cancel the Stoploss order with the original parameters and enter a new order with a higher stop price.

  • Direction: sale
  • Purchase price: CZK 100
  • Current price: CZK 120
  • Stop price: CZK 115
  • Objective: sell the share if the price drops to the stop price level.

Placing an order

Select "Stoploss" as the type and fill in the "Stop Price (CZK)" field.

  • For a Stoploss market order, do not fill in the "Price (CZK)" limit price.
  • For a Stoploss limit order, do not fill in the "Price (CZK)" market price.
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