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. For sell orders, the stop price can automatically adjust higher based on the bid. For buy orders, the stop price can automatically adjust lower based on the ask price. Once the stop price has triggered, a market order market order to buy/sell is sent to the market.

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 stock price goes down. If XYZ drops to about $18/share, the trailing stop-on-quote order is triggered once the bid is $18 ($20 - $2) or lower, and the order will be placed as a market order. Conversely, if XYZ stock prices go 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 only be triggered if the stock 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. Click the Trade tab. Make sure Stocks/ETFs is selected from the menu bar on the left.
  2. Select Sell from the first 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%.

  1. Select Percent from the Trail Type drop-down menu.
  2. Select Duration (Today, Good until Cancelled, or Good Till Date).

Note– If Good Till Date is selected, a date must be entered.

  1. Click Review Order.
  2. Review the order and click Place Order.

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

  1. Click the Trade tab. Make sure Stocks/ETFs is selected from the menu bar on the left.
  2. Select Sell from the first 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.

  1. Select Points from the Trail Type drop-down menu.
  2. Select Duration (Today, Good until Cancelled, or Good Till Date).

Note– If Good Till Date is selected, a date must be entered.

  1. Click Review Order.
  2. 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.