Trailing stop limit order

A trailing stop limit order allows investors to set a 「trailing amount」 or 「trailing ratio」 so that the system continually calculates the stop price as the market fluctuates. When the stop price is hit, a buy/sell limit order will be submitted at the last calculated limit price. A trailing stop limit order is guaranteed a specific execution price. However, there is no guarantee that the order will be filled.

A trailing stop limit order follows the "buy high and sell low" rule. The trailing amount or ratio should be greater than 0, and the specified spread needs to be no less than 0.


1. Examples

1.1 Buy trailing stop limit order

Assuming stock XYZ has a current price of 10, you submit a buy trailing stop limit order with a 50% trailing ratio and 1 spread. So, the order's initial stop price will be 15 (10+10*50%). When the market price falls, so does the stop price; when the market price rises, the stop price doesn't change. A buy limit order set at 16 (15+1) will be submitted as soon as the stop price is hit.

Before the buy order fills, if XYZ's market price falls to as low as 8, the stop price will be adjusted to 12 (8+8*50%). When XYZ's market price rises to 12 or higher, a buy limit order set at 13 (12+1) will be submitted automatically to the clearing broker.

1.2 Sell trailing stop limit order

Assuming stock XYZ has a current price of 20, you submit a sell trailing stop limit order with a 5 trailing amount and 1 spread. So, the order's initial stop price will be 15 (20-5). When the market price rises, so does the stop price; when the market price falls, the stop price doesn't change. A sell limit order set at 14 (15-1) will be submitted as soon as the stop price is hit. 

Before the sell order fills, if XYZ's market price rises to as high as 30, the stop price will be adjusted to 25 (30-5). When XYZ's market price falls to 25 or lower, a sell limit order set at 24 (25-1) will be submitted automatically to the clearing broker. 


2. Order time 

Clients can place trailing stop limit orders at any time via the app. 


3. Time-in-force 

Clients can set a trailing stop limit order's time-in-force. If the order is not filled in full during the validity period, the unfilled portion will be cancelled automatically by the system. 

If the order fails to be executed due to risk management or other reasons, it will be in "Failed" status, and the system will not continue to place a limit order.


4. Trigger time 

If a trailing stop limit order meets the trigger condition during the preset trading period, the system will automatically submit a limit order to the clearing broker. 

The trailing stop limit order will not be triggered if the trigger condition is met outside the preset trading period.


5. Stop price

5.1 Buy trailing stop limit order

● If a trailing amount is set,

Initial stop price = initial market price + trailing amount

Adjusted stop price = lowest market price before order is triggered + trailing amount

● If a trailing ratio is set,

Initial stop price = initial market price * (1 + trailing ratio)

Adjusted stop price = lowest market price before order is triggered * (1 + trailing ratio)


Buy trailing stop limit order price = initial/adjusted stop price + specified spread

5.2 Sell trailing stop limit order

● If a trailing amount is set,

Initial stop price = initial market price - trailing amount

Adjusted stop price = highest market price before order is triggered - trailing amount

If a trailing ratio is set,

Initial stop price = initial market price * (1 - trailing ratio)

Adjusted stop price = highest market price before order is triggered * (1 - trailing ratio) 


Sell trailing stop limit order price = initial/adjusted stop price - specified spread


6. Explanations and notes

6.1 After a trailing stop limit order is triggered, there is no guarantee that a limit order will be successfully placed due to reasons such as insufficient buying power or positions.

6.2 After a trailing stop limit is triggered, the system will place a limit order automatically. However, there is no guarantee that it will be filled. If the order is not filled during the time-in-force, it will be cancelled automatically by the system.

6.3 After a trailing stop limit order is triggered, whether it is filled or not, the trigger conditions will not be effective again. Please place a new order if necessary.

6.4 After a trailing stop limit order is triggered, the system will place a limit order. For clients' convenience, the order details will be displayed in the original trailing stop limit order.

6.5 After a trailing stop limit order is triggered, the system will submit a limit order only when the client has enough maximum buying power or positions in the account, and margin may be used.

6.6 Orders cannot be executed in multiple directions at the same time. If the order quantity is greater than the current position, the order will not be executed. For example, a buy and a buyback cannot be executed simultaneously; the same applies to a sell and a short sale. 

6.7 The trailing stop limit order will only be triggered during the preset trading period.

6.8 Advanced orders are simulated by FUTU based on the basic orders and are irrelevant to those advanced orders provided by specific exchanges. Please refer to the corresponding order introduction page for more details. 

Disclaimer

Trailing Stop Limit Order is an advanced order type provided by Futu AU for the client's convenience. While Futu AU endeavors to provide reliable trading services, there can be no guarantee to the absolute reliability of the order algorithm. Futu AU shall not be held liable for any loss or damage arising from any failure to execute an order due to network interruption, server abnormality, and other factors beyond its control.