How do you place orders to CLOSE and STOP at the same time

Discussion in 'Order Execution' started by qll, Jul 27, 2006.

  1. qll

    qll

    How do you place orders to CLOSE and STOP at the same time.

    Maybe I did something wrong. Is there a way to place an order to close my positions and stop loss together? I HSOA at 5.4 and I want to place a stop loss at 5 and sell order at 6. So either it hits 5 or 6, I will close out my positions. My current retail broker does not allow me to place two orders at the same time: sell and stop loss, for the reason that i over sold my positions. What I do currently is
    1 STOP and SHORT, then ask them to wash the shares.
    2 STOP 50% of the share and SELL 50% of the shares. That case I also have 50% for unlimited risks. I only use this when I don't see the directions clear enough.
     
  2. :confused:
     
  3. Huh??? Isn't the CLOSE what happens when the STOP is executed?
     
  4. hmmm, let's see. I think what the OP means is that after he has opened a position he wants to close out at either a precalculated stop or profit.

    To get out at a profit target you need a "limit" order.
    To get out at a loss position you'll need a "stop" order.

    You can place both of them at the same time and when one is executed the other gets cancelled. This is called a OCA (One Cancels Another) order.

    Now if you want to get out at a partial position you may need two OCA's.

    Hope this helps.

    vital statistics


    ps I think that if your broker says you have "oversold" then that means that you have not enough margin (money) in your account for the position. Most brokers automatically close the position then since they do not want to run the risk of financial loss.

    If this is not the case, and you have sufficient funds, then I think the broker is pulling you the wool over your eyes and you should look for another broker. A broker has the obligation to educate you about some of the order options, eg visit the Interactive Brokers website and you find all kind of information on this subject. You should not need to come here and ask, sounds like you are very new and in that case I think you are not yet ready to trade.
     
  5. If I understand your question correctly, perhaps try to do:

    1st: A new long position @5.4;
    2nd: A sell order @5 for stop loss;
    3rd: A sell order @6 for taking profit;
    4th: A buy order @(say)15 for balancing overall positions.

    Is that what you want?
     
  6. qazmax

    qazmax

    I think what you mean is Order Cancels Order (OCO). Some brokers offer an OCO or Order cancels all. This allows you to have a below stop and an above limit sell and not risk going short if both execute.

    This order type is not recognized by exchanges or ECNs that I am aware of (things change all the time though). It is a functionality offered via your broker.

    :)
     
  7. Hmmm? First off, try another broker (who will let you have two orders in).

    Assuming you're long at $ 5.40.

    Enter a straight "Sell" at 6.00. To close.

    Enter a Stop Loss trigger to sell at $5.00 to "close".

    Broker is afraid you might sell at $5.00 and then have illegal short sale go off at $6.00...but if you mark both orders "close" then they should, by definition, be OCO as mentioned above.

    (I may be wrong, since we rarely, if ever, use Stop orders, and don't leave GTC orders in at all). We prefer "alerts" so we can evaluate the trade with a current snapshot of the market...but I realize that some people can't be in front of a computer all the time.

    Don
     

  8. This was a very big concern of mine in my early days of trading. I asked one of my online brokers this very same question and he said it was to protect me from the possibility of my long position turning into a short position if one order was triggered and then the other was triggered. I had a hard time convincing him that I wanted one order to "automatically cancel" the other. I have learned that some brokers do allow one to cancel the other but I don't know what that type of order is called.

    Being a short term trader I now just concentrate on the stop loss. The instant I am long in a stock I type in my stop loss (I have this amount written down before I place my long order) and send it onto my broker, I do not wait! I don't know how many times I have bought in at the right spot, sent in my stop loss, and then come back to my screen three or four hours later and see my stock screaming at a higher price level. I run up my stop loss, get closed out and pat myself on the back for earning a 30 or 40% return for a few hours "work." The stock consolidates sideways for a few days and when I least expect it the price blasts out of the gate again and triples or quadruples in price in the next few days. I end up kicking myself for getting out so early. Since switching to candlesticks I can see when a major run is running out of steam so I can then get out at the right time by pushing up my stop loss and let the market gently tap me out.

    I have grown very fond of a "trailing stop loss." That and candlesticks with volume bars has protected me and has made me a vulgar amount of money. If Martha Stewart had used a trailing stop loss she wouldn't have gone to jail.

    Candlesticks + Volume + 2 or 3 Indicators = :D

    As Dave Draper likes to say, "It works for me."

    -1bigsteve (o:
     
  9. You can't do it with your current broker. Many brokers offer what you're looking for -- one order cancels another when triggered is what you want. Change brokers. As far as i know OptionsXpress offers it even though if you're not doing options, they suck.