Markets · 6 pages · 12 min
Why a stop is not a guarantee
A stop price only triggers another order, so the exit can be worse than the stop or can miss entirely.
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From the opening
A stop does not guarantee a fill at the stop price, because that price only launches a child order. A child market order can fill much worse in a fast move, and a child limit order can fail to fill if the market never trades back at the limit. The opening covers the trigger is not a fill, a gap fills through the stop, and a limit child can miss.
The rest of the brief — the later sections and the reading notes — opens after Stripe confirms payment.
Inside
- The trigger is not a fill
- A gap fills through the stop
- A limit child can miss
- A paid guarantee is a different product
- Where the idea stops applying
- A distinction worth keeping
Sources
- Stop-order slippage through the trigger
- Guaranteed stop as a separate contract