Stop Order VS Market Order

Please note that below important information is provided by International Broker.

What is Stop Order?

  • A Stop Order — i.e. a Stop (Market) Order — is an instruction to buy or sell at the market price once your trigger (‘stop’) price is reached, subject to any additional instructions for handling/simulating the particular Stop Orders type you specified and other order conditions you specify when submitting your order. Please note that a Stop Order is not guaranteed a specific trade price and may trade significantly away from its stop price, especially in volatile and/or illiquid markets.
  • Stop Orders may be triggered by a sharp move in price that might be temporary. If your Stop Order is triggered under these circumstances, you may buy or sell at an undesirable price. Sell Stop Orders may make price declines worse during times of extreme volatility. If triggered during a sharp price decline, a Sell Stop Order also is more likely to result in a trade well below the stop price.
  • Placing a limit price on a Stop Order may help manage some of these risks. A Stop Order with a limit price — a Stop (Limit) Order — becomes a limit order when the stock reaches the stop price and other conditions are met. By using a Stop (Limit) Order instead of a regular Stop Order, you will receive more certainty regarding the trade price, but there is the possibility that your order will not trade at all if your limit price is not available in the market when the order is triggered.
  • In accordance with our obligations as a broker, large Stop (Market) Orders may be split into smaller orders, which will be traded over time. This is designed to reduce the impact of these large orders on the market, including the impact your order has on the market price.
  • Please note that we will send you similar FYIs each month in which you place a Stop Order, to remind you of this information, which IBKR is providing in accordance with its regulatory obligations.

What is Market Order?

  • Please note that a Market Order is an instruction to trade your order at any price available in the market, subject to any additional instructions for handling/simulating the particular order type you specified and other order conditions you specify when submitting your order. A Market Order is not guaranteed a specific trade price and may trade at an undesirable price. If you would like greater control over the trade prices you receive, please submit your order using a Limit Order, which is an instruction to place your order at or better than the specified limit price, or submit an algorithmic Market Order (IBALGO).
  • In accordance with our obligations as a broker, large Market Orders may be split into smaller orders, which will be traded over time. This is designed to reduce the impact of these large orders on the market, including the impact your order has on the market price.
  • Please note that we will send you similar FYIs each month in which you place a Market Order, to remind you of this information, which IBKR is providing in accordance with its regulatory obligations.

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