How risky is stop order?

Discussion in 'Order Execution' started by traderzhangSan, Jun 28, 2010.

  1. My understanding that stop order is market order triggered when price dropped to a certain level. if price is very violent and drops 100 points in a matter of second,
    Can you get order executed at specified price?

    what 's the risk here in sudden price movement in trading ES?
     
  2. schizo

    schizo

    There are two types of STOP orders: Stop Market and Stop Limit. When the stop gets hit, one becomes a market order while the other a limit order.

    If you use a stop market order, you're liable to get a bad fill when the market is very volatile. With a stop limit order, you're most likely not get a fill at all.

    There's no risk of using stop. On the contrary, the biggest risk to you is being dumb not to use a stop. In the event of another Flash Crash, you definitely will lose everything.