0

I had a security trading at 2.10, i set a stop limit to trigger at 2.05 and sell on limit at 2.00 to incur a maximum loss of .10 per share. The security reached 2.05, I went to check my order status and the limit was executed at 2.04 even though it was a stop limit (not stop market) of 2.00 with a trigger of 2.05.

Any ideas what i did wrong ?

arrydavid
  • 381
  • 1
  • 4
  • 8
  • 5
    I don't see what you're asking. You told the broker to sell if the stock drops to $2.05 or below if he can get a price better than $2. It hit the price you said to sell at, and he sold it at $2.04. What exactly did you expect? – Kevin Jan 09 '18 at 19:09
  • i expected that because i set a limit price they would only sell at exactly 2.00 i guess it only works the other way around for buying – arrydavid Jan 09 '18 at 19:11
  • 3
    Limit sell = at or above. You got lucky and it sold above. – Kevin Jan 09 '18 at 19:12
  • @DStanley yes, yes. I've clarified. – Kevin Jan 09 '18 at 19:15
  • 1
    @arrydavid See How do exchanges match limit orders? – Kevin Jan 09 '18 at 19:15
  • So in future i should make my trigger price closer to the actually price im willing to sell at, correct? – arrydavid Jan 09 '18 at 19:17
  • 6
    Your sell trigger should be "at what price do I think this stock is in trouble and want to get out". Your limit should be "what's the absolute minimum price I want to get when I sell". There's no rule as to how close or far apart those should be. – D Stanley Jan 09 '18 at 19:47
  • 2
    "i expected that because i set a limit price they would only sell at exactly 2.00" Why would you want them to sell at $2.00 if they can sell at $2.04? – TripeHound Jan 10 '18 at 07:47
  • @TripeHound because 2.00 is the absolute most i was willing to lose, but in hopes that it hit 2.02 and went back up is what my logic (wrong logic) was

    Thanks for all your answers, i understand what i did not before!

     – arrydavid Jan 18 '18 at 03:25

1 Answers1

0

You need to understand that there is no ’retroactive’ selling to a historic price.
What happens is that there is a sale at 2.04, and that triggers your watch point. Then, you have the choice to sell for whatever the next deal price is (or not), but it could be 2.04 or 1.90 - or 2.10 or 0.01 or anything. There is no way to go back in time and ’have sold’ at 2.05, if that price is no longer offered, it is no longer offered.

Aganju
  • 37,683
  • 7
  • 57
  • 119