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Trailing stop order

A trailing stop 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 market order will be submitted. A stop order is not guaranteed a specific execution price and may execute significantly away from its stop price. 

The order follows the "buy high and sell low" rule. The trailing amount or ratio should be greater than 0.

 

1. Examples

● Buy trailing stop order

Assuming stock XYZ has a current price of 10, you submit a buy trailing stop order with a 50% trailing ratio. 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 market order 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, a buy market order will be submitted automatically to the clearing broker and filled at the market price. 

● Sell trailing stop order

Assuming stock XYZ has a current price of 20, you submit a sell trailing stop order with a 5  trailing amount. 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 market order 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 the price falls to 25 or lower, a sell market order will be submitted automatically to the clearing broker and filled at the market price. 

 

2. Order time 

Clients can place orders at any time via the app. 

 

3. Time-in-force     

Clients can set the order's Time-in-force. If the order is not filled in full, the unfilled portion will be cancelled automatically by the system. If the order fails to be executed due to risk management or other reasons, the order status will update to "failed," and the system will not continue to place the order.

 

4. Trigger time

If the order reaches the trigger condition during the allowed trading period set when the user places the order, the order is triggered and the system automatically submits the preset order to the upstream. If the order reaches the trigger condition outside the allowable trading period set when the user places the order, the order will not be triggered. Enter the set allowable trading period, and then judge the trigger condition.

If the order reaches the trigger condition during the preset trading period, the system will automatically submit the order to the clearing broker. The trailing stop order will not be triggered if the trigger condition is met outside the preset trading period.

 

5. Stop price

● Buy trailing stop order

If the trailing amount is set,

Initial stop price = initial market price + trailing amount

Adjusted stop price = the best price of a stock before triggering a market order + trailing amount

If the trailing ratio is set,

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

Adjusted stop price = the best price of a stock before triggering a market order * (1 + trailing ratio)

 

● Sell trailing stop order

If the trailing amount is set,

Initial stop price = initial market price - trailing amount

Adjusted stop price = the best price of a stock before triggering a market order - trailing amount

If the trailing ratio is set,

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

Adjusted stop price = the best price of a stock before triggering a market order * (1 - trailing ratio)

 

6. Notes

6.1 Placement of the conditional order does not directly freeze the customer's buying power or position. It will be frozen only when the condition of the order is triggered. Please note that triggering of conditional order does not guarantee that the order will be successfully submitted to the upstream broker or the exchange. The conditional order will be failed to submit due to insufficient buying power or positions of the account at that time.

6.2 After the trailing stop order is triggered, the system will place a market order automatically as soon as the stop price is hit. However, there is no guarantee that the order will be filled. If the order is not filled during the Time-in-force, it will be cancelled automatically by the system.

The market order notes are as follows.

(1) After you confirm the submission of a market order, Futu will submit it to the Hong Kong Stock Exchange at the five best bid or ask prices according to the buy or sell instruction.

(2) A market order may be divided into several small orders for execution, and each small order may be filled at a different price.

(3) If the number of placed orders is small, a market order may not be fully filled. The unfilled part will be automatically cancelled and, after being cancelled, will be in "Cancelled" status.

(4) If the liquidity of a stock is poor or there is no placed order for the time being, a market order may not be filled and will be automatically cancelled. After being cancelled, the order will be in "Cancelled" status.

(5) A market order does not specify a price and may fill at an unexpected price when market conditions change rapidly.

(6) During the trading hours when the morning session or afternoon session has just opened, there may be a greater chance that transaction prices will deviate since orders that have accumulated before the market opens need to be processed.

(7) For the sake of risk control, the price of a market order put on hold in the system is calculated as the current price * market order multiplier, and the market order multiplier is subject to adjustment by Futu from time to time according to market conditions. Your buying power will be reduced accordingly. After the order is filled or cancelled, the frozen part of your buying power will be released.

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

6.5 Trailing stop orders are only accepted if they close open positions. If the order quantity is greater than the current position, the order will not be executed. 

6.6 The trailing stop order will only be triggered during the regular trading hours.

6.7 Advanced orders are simulated by FUTU based on the basic orders and are irrelevant to Exchanges' advanced orders. Please refer to the actual order page for more details.

Disclaimer

Advanced orders are an order type developed by FUTU for clients' convenience. Meanwhile, FUTU tries to guarantee the execution of such orders. However, please be aware that the execution might be interrupted by poor network connections, server errors, etc. FUTU shall not be responsible or liable for any loss incurred.