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Stop order

A Stop order is an instruction to submit a buy or sell market order when the client-specified stop price is hit. A Stop order is not guaranteed a specific execution price and may execute significantly away from its stop price. 

A Stop order follows the "buy high and sell low" rule. The stop price and the market price need to follow the rules: the buy stop price needs to be above the current market price, and the sell stop price needs to be below the current market price.

● A sell Stop order must be entered below the current market price to stop the loss on a long position or protect its profit. 

● A buy Stop order must be entered above the current market price to stop the loss on a short position or protect its profit.


1. Examples

● Buy Stop order

Assuming stock XYZ has a current price of 10, you submit a buy Stop order with a stop price of 15. If XYZ's market price rises to 15 or higher, a market order will be submitted automatically to the clearing broker and filled at the market price (the transaction price is not guaranteed).

● Sell Stop order 

Assume you hold stock XYZ with a cost price of 10. In case the stock price falls sharply in the future, you submit a sell Stop order with a stop price of 15 when the market price is 20. If XYZ's market price falls to 15 or lower, a market order will be submitted automatically to the clearing broker and filled at the market price (the transaction price is not guaranteed).


2. Order time 

Clients can place Stop orders at any time via the app.


3. Time-in-force 

Clients can set a Stop order's time-in-force. If the order is not filled in full during the validity period, the unfilled portion will be cancelled automatically by the system. 

If the order fails to be executed due to risk management or other reasons, it will be in "Failed" status and the system will not continue to submit a market order.


4. Trigger time 

If a Stop order meets the trigger condition during the continuous trading session, the system will automatically submit a market order to the clearing broker.

The Stop order will not be triggered if the trigger condition is met outside the continuous trading session.


5. Explanations and Notes

5.1 After a Stop order is triggered, there is no guarantee that a market order will be successfully placed due to reasons such as insufficient buying power or positions.

5.2 After a Stop order is triggered, the system will place a market order automatically. However, there is no guarantee that the order will be filled. If it is not filled during the time-in-force, it will be cancelled automatically by the system.

Please keep in mind that:

(1) After a Stop order is triggered, Futu AU will submit a market order 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 orders in the order book 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 order in the order book for the time being, a market order may not be filled and will be automatically cancelled. After being cancelled, it will be in "Cancelled" status.

(5) A market order is not guaranteed a better execution price. In particular, a market order may be filled at a higher or lower price when the market changes rapidly.

(6) During the trading hours after the Morning Session or the 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 management, the price of a pending market order is calculated as the current price * 1.2. Your buying power will be reduced accordingly. After the order is filled or cancelled, the frozen part of your buying power will be released.

5.3 After a 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.

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

5.5 After a Stop order is triggered, the system will submit a market order only when the client has enough maximum buying power or positions in the account, and margin may be used. 

5.6 Orders cannot be executed in multiple directions at the same time. If the order quantity is greater than the current position, the order will not be executed. For example, a buy and a buyback cannot be executed simultaneously; the same applies to a sell and a short sale. 

5.7 A Stop order will only be triggered during the regular trading hours. 

5.8 Advanced orders are simulated by Futu AU based on the basic orders and are irrelevant to those advanced orders provided by specific exchanges. Please refer to the actual order page for more details.

Disclaimer

Stop order is an advanced order type provided by Futu AU for the client's convenience. While Futu AU endeavors to provide reliable trading services, there can be no guarantee to the absolute reliability of the order algorithm. Futu AU shall not be held liable for any loss or damage arising from any failure to execute an order due to network interruption, server abnormality, and other factors beyond its control.