gaps and stop losses

[mmnoname]

Hi, I'd like to know what happens if the market gaps over your stop loss. Do you get the next best price? Or is your requested price still filled? If it depends on the broker then lets say O-and-a and IBFX

thank you

[mosad2]

it depends on how fast the move is!
but most of time , U will be filled at the best price.
no matter what broker u use, u have to know onething, they will not pay a penny from thier own pocket!
price sliipped, u pay!

[mmnoname]

So in case of a gap, when my stop loss was completly skipped on I would have to pay the extra correct?

[astro]

Originally Posted by mmnoname

So in case of a gap, when my stop loss was completly skipped on I would have to pay the extra correct?

Correct.

You have to understand the meaning of gaps.
A gap means that the price never existed there.
For example: I have lots of pounds in my pocket (which I bought with USD). You have lots of dollars in your pocket (which you paid pounds for). You have a SL say 1 cent above the current price, meaning you would want to buy back the pounds and sell the dollars you have if price moves against you 1 cent.
Now, the good news (for me) come out (bad news for you): everybody wants to buy pounds now.
But I don't want to sell my pounds! So the offers rise and rise and you can't buy back your pounds since nobody sells them now. Only after the offers have risen 2 cents I start selling my pounds. And here's your gap.
So the best price you could get was 2 cents away from the price prior to the news release and this is were your SL was filled.

This also answers all of those "news traders" that post their raging posts about how their broker scr***d them because they got filled only at the top/bottom of the news spike, etc...


Astro