hi

Am using Tradefair at the moment but got hit by 2 bad slippage losses where it went way past my stop and Im rather displeased with it (they do say stops arent guaranteed so Im not in a position to complain really)

My question is, do you know of a good platform which does guaranteed stop losses? I know there is a premium for it but in the trading im doing thats not such an issue as the most important thing form me is to limit losses to the minimum.

Thanks

Steve

There are two separate things
1) guaranteed stop losses for which you pay a premium
2) unguaranteed stop losses which can suffer slippage

For many spread bettors the extra premium for guaranteed stop losses plus the fact that they have to placed quite a bit away from price make them an expensive form of insurance. Nearly all the firms offer them.

With ordinary stop losses there is of course no guarantee that price will be filled at the stop price, and slippage can occur. For the instruments that I trade most often, which are 6 currencies, 2 indices and one commodity I can say that I almost never get any slippage on my stops. Where problems can occur is on stocks, in particular small stocks. The first half hour of trading in particular can be a big problem for slippage, not just in the spread betting arena, but when using an on line broker or CFDs.

Small stocks is one area where I might be prepared to pay the extra premium of a guaranteed stop.

If you are shopping around for guaranteed stops I suggest looking up the spreads on each firm's website. When I have done periodic surveys Capital Spreads often tends to be a leader on tight spreads, Tradefair Spreads actually use the same platform as Capital Spreads, and firms recently in the press advertising tight spreads include World Spreads. What you will find is that different firms are better for different products, that is why you are best off checking the websites for the products you want to trade.

thanks for the advice, its exactly as you say, im betting on earnings announcements (probably not the best time to run this strategy, a bit volatile) so looking for positive price movemet and close withinin 1 minute of market opening, but i didnt have slippage until today.

Ill take a look at Capital Spreads.

cheers

Betting on earning announcements where a stock can sometimes move 10% in a few minutes you are extremely likely to get slippage, whether you use spread bets, on line brokers, CFDs options or pretty well anything.

So, in working out the potential risk of the trade (to calculate bet size and to measure reward to risk) one approach would be to build in slippage to the budget for the trade, in other words assume that your loss on a trade if it goes against you will be the distance between entry and stop loss PLUS a factor for slippage.

Hi hekuball,

World Spreads provide guaranteed stops for an additional premium, and I quite like their platform.

Shorts and Longs has mandatory free guaranteed stops, which don't hit you with premium but which -- when I last looked -- hit you with way-over-the-odds overnight financing charges on rolling bets. And their list of equities is more limited.

Tony Loton, author --
Stop Orders (the book)

Malcolm

Thanks, if i may pose a question. If I buy company A at say 1000 with a GSL of 10 points. Next day the company opens 50 pts down, do i lose 10 pts or 50 pts?

With an ordinary stop loss you lose 50 points with a GSL you lose 10 points.

At least that is how all the firms I use operate.

So, that is the advantage of GSLs, but you pay for them. It then becomes a trade off, how often will the GSL benefit, and how often will it just mean an additional cost. Bit like paying an insurance premium.

I personally dont use GSL's for the instruments I trade, but each trader will need to make a decision based on
1) their risk preferences
2) their estimate of the benefits of GSL's versus costs
3) the instruments they trade

Oh, how many bettors on Connaught will have wished they had used a guaranteed stop order this week. I didn't have a guaranteed stop, but my loss was diluted by the fact that I tend to run many small positions rather than one big position.

Tony Loton, author of Stop Orders and the Trading Trail

Morning Malcolm, you mentioned in a previous post:

"For the instruments that I trade most often, which are 6 currencies, 2 indices and one commodity"

could you tell us which two indices and the one commodity these are?

kind regards

TSM

FTSE 100
Dow Jones (Wall street) - used to be S&P500 but Dow Jones spreads are tighter now
GBPUSD
EURUSD
USDCHF
USDJPY
USDCAD
AUDUSD

Occasionally Gold (not recently)