Guaranteed Stop Loss Orders

  1. What is a Guaranteed Stop Loss Order?
  2. How does a Guaranteed Stop Loss Order work?
  3. How does using a Guaranteed Stop Loss fit into my trading plan?
  4. How does this benefit my trading?
  5. How much does a Guaranteed Stop Loss Order cost?
  6. How do I place a Guaranteed Stop Loss Order?
  7. Can I change my Guaranteed Stop Loss Order after making a trade?
  8. Can I add a Guaranteed Stop Loss Order to an existing position?
  9. Can I cancel a Guaranteed Stop Loss Order?

1. What is a Guaranteed Stop Loss Order?

A Guaranteed Stop Loss Order (GSLO) is an order that closes your trade at an exact level chosen by you, regardless of market gapping.

A regular Stop Loss may not cover you in times of heightened volatility where markets can “gap” between one price and the next without trading at the prices in between.

At City Index you can add a Guaranteed Stop Loss Order to a wide range of markets. You will only pay a premium for added protection if your Guaranteed Stop Loss Order is triggered.

Our Guaranteed Stop Loss Order offering provides a cost-effective way to manage your risk and covers over 4,000 global markets.

We have listed some of the most heavily traded markets at City Index which are covered by our Guaranteed Stop Loss functionality.

You can view full Guaranteed Stop Loss details on individual markets by accessing the market information sheet in-platform.

The minimum distance required on our Guaranteed Stop Loss offering gives you the ability to control and set your own levels of risk.

Popular markets premiums (charged upon trigger) Minimum distance

 
 
Indices 
   
 Germany 30  3 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 US SP 500  2 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 Wall Street  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 UK 100  3 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
     
 FX    
 EUR/USD  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 AUD/USD  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 GBP/USD  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 USD/JPY  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
     
 Equities    
 DBS Group
 Holdings
 0.25% of notional trade value
 5%
 Facebook  0.25% of notional trade value
 10%
 Noble Group  2.00% of notional trade value
 35%
 Keppel REIT CFD  0.25% of notional trade value
 7.5%
     
 Commodities    
 US Crude Oil  4 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 1%
 Gold  5 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 0.5%
 Silver  2 x CFDs or stake charged in base currency of the market and then converted to the base currency of the account
 1%

2. How does a Guaranteed Stop Loss Order work?

In our example, imagine you have bought 2 Wall Street Index CFDs at 20420 and chosen 20300 as the maximum acceptable loss level. This is where you place the Guaranteed Stop Loss. If triggered this would equate to a $240 loss allowance (20420 – 20300) x 2.

The Guaranteed Stop Loss Order premium for Wall Street is 4 x the quantity of CFDs or stake charged in the base currency of your account. In this case the premium is calculated as 4 x 2 = USD 8 converted to base currency of the account, and is charged only if your Guaranteed Stop Loss Order is triggered.

Two days after you have placed your order, the price of the Wall Street Index suddenly drops lower from 20420 to 20259.

With a Guaranteed Stop Loss Order in place, your trade has been closed out at the pre-determined level of 20300 for a total loss of USD 248 (USD 240 loss on your position + USD 8 premium on the Guaranteed Stop Loss Order when triggered). This prevents further loss due to market gapping.

If you had placed a normal Stop Loss on your position, your losses would have been far greater as you would have been closed out at the next available price, which was 20259.

(20420 – 20259) x2 = $322 total loss

Guaranteed Stop Loss Order Example

3. How does using a Guaranteed Stop Loss fit into my trading plan?

Risk management is a crucial part of any trading strategy, especially for less experienced traders. When trading the financial markets, it is essential to have the right protection against losses to ensure you don’t lose too much too quickly.

Guaranteed Stop Loss Orders are particularly beneficial in volatile markets, or at times of extreme volatility where there is a risk of the markets gapping. They can also help ensure that you don’t risk more than your initial deposit by capping any potential loss at a risk level set by you.

4. How does this benefit my trading?

  • Trade more, with lower margin required by placing a Guaranteed Stop

    When placing a Guaranteed Stop Loss Order, you are limiting your maximum risk, so we ask you for a lower margin. This frees up additional funds for you to trade with.

  • Trade with peace of mind

    With a Guaranteed Stop you know your maximum risk, even in periods of extreme volatility and market gapping. If triggered, it ensures your trade will be closed at the exact level you have chosen.

    Market gapping occurs when prices literally ‘gap’ between one price and the next, without trading at the prices in between.

    This usually happens in times of extreme market volatility. Although this is not common, it is important that you are aware of the potential implications of sudden, sharp changes in market volatility.

    A standard Stop Loss order doesn’t fully protect you from trading risk. This is because the closing trade is executed at the next available price immediately after the order is triggered.

    This can be at the same price, or at a worse price, than the specified execution level. In cases of severe gapping, the execution price may be at a substantially worse price than your order price. This can result in a larger than expected loss on your trade.

    Guaranteed Stop Loss Orders ensure that the level at which an order will be executed is the exact level that you’ve specified, regardless of market gapping.

Guaranteed Stop Losses are most useful:

  • If you want to lower margin required for the trade
  • If you are trading in volatile markets
  • If you don't want to risk more than your initial deposit
  • If the market is prone to gapping (remember, markets can gap both ways)

5. How much does a Guaranteed Stop Loss Order cost?

The cost of your Guaranteed Stop Loss Order is based on the size of the position you want to cover. You only pay a premium if your Guaranteed Stop Loss Order is triggered. This will appear on your next statement as a separate charge. The charge or premium you pay is calculated differently for different markets either as:

Number of points x quantity of your position (for example, Indices such as the Germany 30)

or

Percentage x notional trade value (for example Equities such as DBS Group Holdings)

As a guide, charges for the following popular markets are currently:

  • Germany 30 CFD:
    3x quantity of CFDs charged in base currency of the market
  • EUR/USD (per 0.0001) CFD:
    4 x quantity of CFDs charged in base currency of the market
  • DBS Group Holdings Share CFD:
    0.25% of notional trade value of the market
  • US Crude oil CFD:
    4 x quantity of CFDs charged in base currency of the market

and then converted to the base currency of the account


6. How do I place a Guaranteed Stop Loss Order?

To place a Guaranteed Stop Loss Order on a market, open the deal ticket in-platform and select the direction of the trade you want to place, either Buy or Sell.

Next, enter the quantity of your order. You can either enter a figure manually or select a pre-determined quantity using the drop-down menu option.

To place your Guaranteed Stop Loss Order, open the Stop & Limits tab. Select the Stop checkbox, then fill in the price and quantity to determine the level at which your position will close out. Remember to tick the guaranteed checkbox.

Once you have filled in all the information for your stop, click the Place Trade Button and your position will be opened with a Guaranteed Stop Loss Order attached.

GSLO choose stop and limit

GSLO place trade

7. Can I change my Guaranteed Stop Loss Order after making a trade?

You can change the level of an order after placing a trade by opening your position and amending the price or quantity at which your Guaranteed Stop will be triggered.

You will not be charged for amending a Guaranteed Stop Loss Order on an open trade.

GSLO edit stops and limits

8. Can I add a Guaranteed Stop Loss Order to an existing position?

To add a Guaranteed Stop Loss Order to a current position, visit the open position tab in platform. Open your trade and select the Stops & Limits section within the deal ticket. Then select the price and quantity at which you want your Guaranteed Stop to be triggered.

There is no additional charge for adding a Guaranteed Stop Loss Order to an open trade.

Note: the market will need to be open for you to add your order.

9. Can I cancel a Guaranteed Stop Loss Order?

You can cancel any Guaranteed Stop Loss Order on your account at any time, free of charge, by opening your position and unchecking the Guaranteed Stop.

GSLO update position

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