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I put in an entry order of 11.27$, a limit order to sell at 12.49$ and stop loss order of 10.66$ . My trade was executed and two days later, the price dropped to 3.49$ !!

What happened to my stock? Was it sold at the stop loss price of 10.66$ or because of the sharp drop, was it sold at 3.49$ ?

  • FWIW, your attached picture offers nothing useful since it's just a picture of some candlesticks with no prices that I can see. It seems to me that you answered your own question: "My trade was executed and two day after the price was dropped into 3.49$" If the trade went off two days before it dropped to $3.49 then what's the problem? – Bob Baerker Nov 12 at 16:21
  • In the 11/11 in the end of the market hours (4:00pm) the stock was on close price of 11.01$ and day after in the 11/12 in the start of the market(9:30 AM) the stock was already on 3.17$ in the first minute. So did I sell the stock at my sell stop order price (10.66$) or in the market price - 3.17$ ? – Raz Gavriel Nov 12 at 17:07
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    If the stock gapped down through your stop price, you fill could be anywhere from $10.66 down to $3.17 unless it was a limit order. You should be asking your broker for trade confirmation or looking at your account statement at your broker's web site. – Bob Baerker Nov 12 at 22:25
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    I'm voting to close this question as off-topic because information about individual private trades is not available to the public. – Lawrence Nov 13 at 12:24
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A "stop-loss" order is an order to enter in a market order if the price goes below a certain point. It doesn't guarantee execution at that price.

Where this can go bad is if the price drops dramatically in after-hours trading or if the price drops so fast that by the time your market order is placed the market price is well below your stop price. I can't tell which has happened here.

Your broker should be able to tell you what price you sold your stock at through your order history.

  • In the 11/11 in the end of the market hours (4:00pm) the stock was on close price of 11.01$ and day after in the 11/12 in the start of the market(9:30 AM) the stock was already on 3.17$ in the first minute. So did I sell the stock at my sell stop order price (10.66$) or in the market price - 3.17$ ? – Raz Gavriel Nov 12 at 17:08
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    @RazGavriel Again, your broker should show you in the transaction history, but most likely it was near the opening price of $3.17. Trades aren't necessarily executed at the stop price. – D Stanley Nov 12 at 17:39
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Stop-loss order sounds straightforward, but the execution by the broker is quite complicated.

Because there is plenty of room for exploit as explained by stop-loss trap, so some broker may use a delay algorithm to prevent exploitation, especially towards some low activities stock.

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I think you have to let what D Stanley wrote in his first sentence really settle in: it's a market order.

You may want to consider a stop-limit order, as Schwab explains:

An order that becomes a Limit Order once the security trades at the designated Stop price. A Stop Limit Order does not guarantee an execution.

To enter a Sell Stop Limit Order, you must enter a Stop price below the current security price and a Limit price less than or equal to the Stop price. If the security trades at or below the Stop price, the Limit Order to sell the security you entered will be activated.

This type of order may not be executed if the price drops too quickly. You may want to fine tune the order to not sell in full lots.

To avoid being left holding on to an asset that drops so dramatically, it should be used in combination with a Trailing Stop order, where you set the Trailing Stop order below your Stop Limit order. The Trailing Stop will execute as a market order, so you still risk getting out to late, but you will have a much better shot than simply putting a in a stop order.

A Trailing Stop for a Sell order sets the stop price at a fixed amount or percentage below the current Bid price. If the Bid price rises, then the stop price will rise by the increased points/percent amount. Conversely, if the Bid price falls, the stop price will remain the same.

If the next day the price is drastically different, it will still behave according to the current bid and ask price, and not a fixed dollar value.

  • To be fair, though, this wouldn't help in a case where the last price is over the stop and the opening price is far below. You'd just be stuck with the stock as if you hadn't had a stop-loss or stop-limit order at all. – xyious Nov 15 at 21:06
  • @xyious Right, it should be used in combination with a trailing stop placed below the limit order. – Louis Nov 16 at 0:00

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