4

Let's say I have shares of XYZ whose current value is $100.

If I want to limit losses, I can automatically trigger a sale if the price goes below $90, so I place a SELL order of type STOP for $90.

If I want to lock in gains, I can automatically trigger a sale if the price goes above $110, so I place a SELL order of type LIMIT for $110.

My broker, Scotia iTrade, lets me have one of the above open orders, but not both, giving me the message:

"Your Account does not hold sufficient shares of this security. Please check your open orders"

I know both orders can't go through, but it still seems logical to me to have them both open. Is there a reason why I can't have both orders open? Is there a workaround to achieve the goal of limited losses OR locking in gains depending on where the market goes?

  • 2
    Have you asked Scotia iTrade? – quid Sep 23 '16 at 17:46
  • @quid yes, no answer yet though. I am wondering if it is a general limitation all brokers set, or just some. – alberto56 Sep 23 '16 at 18:06
  • You can. At least, at every broker I've used. You would create a one-cancels-the-other order, where one order is the stop limit and the other is the sell limit. When one of the orders executes, the other is automatically canceled. – TainToTain Sep 23 '16 at 18:24
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You are looking for a one cancels the other order as described here. Some online trading platforms allow this but I don't believe all do. You should be able to call your broker and place this order with a real person (in some cases the commission may be higher). You might also call the tech support number for the website and ask if they can walk you through placing the order online as some orders like this may not be intuitive.

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