What is Trailing Stop Limit Order?

Sell Trailing Stop Limit

When the market price rises, the stop price actively trails the price movement of the market and continues to maintain a percentage or dollar amount below the market price. When the market price falls to or below the stop price, the system will submit a limit order.

Buy Trailing Stop Limit

When the market price falls, the stop price actively trails the price movement of the market and continues to maintain a percentage or dollar amount above the market price. When the market price rises to or above the stop price, the system will submit a limit order.

1. Example:

• Buying Direction

If you submit a Trailing Stop Limit order to buy with a trailing ratio of 5% and a specified spread is 1 (you can determine the specified spread based on your position) when the market price is USD20, the initial trigger price of the order will be set to USD21. When the market price falls, the trigger price will also fall; when the market price rises, the stop loss trigger price will remain unchanged. When the stock price rises to or exceeds the trigger price, a limit buy order will be triggered.

If the lowest price of the product falls to USD10 after the order is placed and before it is triggered, the trigger price will be updated to USD10.5 (10+10x5%). The order will automatically be submitted to the market with a limit price of USD10.5 when the current market price of the product reaches USD11.5 or above, the execution is not guaranteed.

• Selling Direction

Assume you have submitted a Trailing Stop Limit order to sell with a trailing amount of USD 2 and a specified spread of 1 when the market price is USD 30, the initial stop loss trigger price of the order will be USD 28. When the market price rises, the stop loss trigger price will also rise; when the market price falls, the stop loss trigger price will remain unchanged. When the stock price falls to or below the stop loss trigger price, a limit order to sell will be triggered.

If the price of the product in the order has risen to a maximum of USD 40 after placement but before triggering, and there is no higher price afterwards, then the trigger price will be updated to USD 38 (USD 40 – USD 2). If at this point, the stock market price declines to USD 38 or below, an automatic limit order will be submitted to the market at a price of USD 37, with no guarantee of execution.

2. Order Time

Orders can be placed at any time on the client’s side.

3. Order Duration

Clients can choose whether their orders are valid only on the day of the order or Good-Til-Cancelled (GTC). If an order is not fully executed within the specified period, the system will automatically cancel the order.

If an order fails during the execution process due to risk control measures, company actions, or other reasons, the order status will be updated to cancel, and the system will no longer continue to submit the order.

4. Trigger Time

The trading session can be set as "Include Extended Hours" or "Only Regular Hours ". Orders will be triggered based on the different time settings. After the conditions are triggered, the system will automatically submit the default order to the market.

5. Calculation Logic of Trigger Price

● Buying

When the trailing amount is set,

Initial trigger price = Initial price + trailing amount

Trigger price = Lowest market price after placing the order and before triggering + trailing amount

When the trailing ratio is set,

Initial trigger price = Initial price * (1 + trailing ratio)

Trigger price = Lowest market price after placing the order and before triggering * (1 + trailing ratio)

Price of the trailing stop limit order to buy = Trigger price + specified spread

● Selling

When the trailing amount is set,

Initial trigger price = Initial price - trailing amount

Trigger price = Highest market price after placing the order and before triggering - trailing amount

When the trailing ratio is set,

Initial trigger price = Initial price * (1 - trailing ratio)

Trigger price = Highest market price after placing the order and before triggering * (1 - trailing ratio)

Price of the trailing stop limit order to sell = Trigger price - specified spread

6. Explanation and Notes

1. Placing a conditional order does not immediately freeze buying power or positions. Validation will only occur when the order meets the trigger conditions. Please note that triggering a conditional order does not guarantee successful submission to the upstream broker or exchange and it is possible to fail due to insufficient buying power or positions in the account.

2. After the order is triggered, there is no guarantee of execution. A trailing stop limit order is simply a system that automatically submits a limit order for the investor after the trigger price is reached. The processing logic for the submitted order after triggering is the same as a regular order. If there is no match, the order will be automatically cancelled after the time limit expires.

3. After the order is triggered, whether the corresponding order is executed or not, the order trigger conditions will not be activated again. If needed, please place a new order.

4. After the order is triggered, the system will submit a limit order. For the convenience of the client’s order management, the order type remains unchanged and still be displayed as a trailing stop-limit order.

5. After the order is triggered, it will be determined whether the order can be submitted to the upstream broker or exchange based on the account's maximum buying power, which may involve financing. Placing a trigger order does not freeze the buying power. However, if the order amount in the cash account exceeds twice the net asset value of the account, the order cannot be placed. Similarly, if the order amount in the margin account exceeds five times the net asset value of the account, the order cannot be placed.

6. If the order is for position closure and the order quantity is more than the position at the time of triggering, the order will not be executed.

7. Trailing stop limit orders will only be triggered within the allowed trading session.

8. The orders are limited to US securities.

9. If the number of pending trigger orders is equal to or greater than 50 orders, no further advanced orders can be placed.