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What is a trailing stop order?

A sell trailing stop order sets the stop price at a fixed amount below the market price with an attached “trailing” amount. As the market price rises, the stop price rises by the trail amount, but if the stock price falls, the stop loss price doesn’t change, and a market order is submitted when the stop price is hit. Please note that with a Trailing Stop order, your order may sell for a lower price if the price of the security opens below your fixed amount or goes through the price. “Buy” trailing stop orders are the mirror image of sell trailing stop orders, and are most appropriate for use in falling markets.

ToledoTrade may simulate tailing stop orders on exchanges.

Jason Toledo

Jason brings more than 15 years of experience in online trading. Prior to starting ToledoTrade in 2019, Jason held senior and executive level positions at Scottrade, OptionsHouse and Zacks Trade. Jason is passionate about educating self-directed traders and is a leader and expert in the online trading industry.

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