Trailing Stop-on-Quote Orders

A trailing stop-on-quote order, also called a trailing stop-loss order, is a stop order where the stop price adjusts by a given percent or point (dollar) amount. This order type can provide additional potential for you to lock in gains, while still protecting yourself from the investment's downside. The stop price can automatically adjust based on the last price for the security. For sell orders, the execution is triggered by the bid price. For buy orders, the execution is triggered by the ask price. Once the stop price has triggered, a market order to buy/sell is sent to the market. Keep in mind that with any stop order the execution price can be different than your trigger price due to market volatility.

For example, if you own XYZ stock at $20/share and decide you would like to sell your shares if the stock was to drop $2, you could set a trailing stop-on-quote order to automatically sell if XYZ goes down. If XYZ’s bid drops by $2/share, the trailing stop-on-quote order is triggered if the bid is $18 ($20 - $2) or lower, the order will be placed as a market order.

If XYZ’s last price goes up, the trigger price for the trailing stop-on-quote also goes up. For example, if XYZ stock increases to $25/share, a trailing stop-on-quote order will be triggered if the last price drops and the bid comes down to $23 ($25 - $2) or less.

How to place a trailing percent sell stop-on-quote order:

  1. Hover over Trade and click Stocks/ETFs Order under the Trade Stocks/ETFs heading.
  2. Select Sell from the Buy/Sell drop-down menu.
  3. Enter the number of shares.
  4. Enter the symbol.
  5. Select Trailing Stop-on-Quote as the order type.
  6. Set the trailing stop amount (percent).
    Example: Enter 1 for 1%. Do not translate the percent into decimal format. The minimum for any percent trailing sell stop-on-quote order is 1%.
  7. Select Percent from the Trail Type drop-down menu.
  8. Select Duration (Today, Good until Cancelled, or Good till Date). 
    Note: If Good till Date is selected, a date must be entered.
  9. Click Review Order.
  10. Review the order and click Place Order.

How to place a trailing point sell stop-on-quote order:

  1. Hover over Trade and click Stocks/ETFs Order under the Trade Stocks/ETFs heading.
  2. Select Sell from the Buy/Sell drop-down menu.
  3. Enter the number of shares.
  4. Enter the symbol.
  5. Select Trailing Stop-on-Quote as the order type.
  6. Set the trailing stop amount (points/dollars).
    Example: Enter 2.00 for $2; .50 for 50 cents. The minimum for any point trailing sell stop-on-quote order is $.01.
  7. Select Points from the Trail Type drop-down menu.
  8. Select Duration (Today, Good until Cancelled, or Good till Date). 
    Note: If Good till Date is selected, a date must be entered.
  9. Click Review Order.
  10. Review the order and click Place Order.

When will the trigger price change?

Trailing Stop-on-Quote to Sell

If the difference between the stock/ETF last price and trigger price exceeds the trailing stop amount, then the trigger price will be adjusted. The new trigger price will be determined by subtracting the trail stop amount from the stock's or ETF's last price.

Trailing Stop-on-Quote to Buy

If the difference between the stock/ETF last price and trigger price exceeds the trailing stop amount, then the trigger price will be adjusted. The new trigger price will be determined by adding the trail stop amount to the last price.

Will Scottrade adjust my trailing stop-on-quote order if the stock goes ex-dividend?

Yes, Scottrade will adjust the trigger price for your trailing stop-on-quote order if the stock goes ex-dividend. For trailing stop-on-quote sell and trailing stop-on-quote buy to cover orders, the trigger price will be reduced by the amount of the dividend. This applies to normal dividends only; special dividends can result in order cancellation.

A stop on quote order does not guarantee an execution price equal to the stop on quote price. The price of a security may move significantly during volatile markets and may trigger a stop on quote order resulting in the execution at a price substantially different than the stop on quote price.

A trailing stop-on-quote order is similar to a stop-on-quote order, but instead of a stop price, you are able to set a stop condition, creating a moving ("trailing") activation price. You can enter a stop condition in points or by percentage. Scottrade holds your trailing stop-on-quote order on our servers on a "not held, best-efforts basis"; this means that we do not deliver your order to a market center until your stop condition is met.

If your stop condition is met, we will send your order as a market order. Like a regular stop-on-quote order, your order may not be filled at your stop price, especially in certain fast market conditions.