I've been reading the IB documentation, but am still confused about what the stop price in the trailling stop does. For example, say I have a stock currently at $10 and if the stock goes to $12, I'd like a trailing stop of .50. If I enter a trailing stop of .50 with a stop price of $12, does this accomplish what I'm trying to do. If not is there another way to do it?
Example You have purchased 100 shares of XYZ for $50.00/share and want to lock in a profit and limit your loss. You set the trailing stop 2 points below the current market price. The price of XYZ starts rising and hits $65.00 over the course of the month. The trailing stop price has adjusted accordingly and is 2 points below $65.00 (or $63.00). Suddenly the price begins to drop. Once it hits $63.00 the trailing stop order is activated, and a market order to sell 100 shares of XYZ is submitted. http://www.interactivebrokers.com/en/trading/orderTypesMatrix.php?ib_entity=llc#trail
Please note for a trailing stop you are designating a trail amount NOT a stop price. We recently released 'trailing stop limits' which use the same trigger logic but submits a limit order.
Is there anyway I can enter an order that will wait until a stock reaches a certain price and then enter a trailing stop? I tried to do this with a conditional order, but it wouldn't let me have a trailing stop with a conditional order. To use your example, if I purchased a stock at $60. When the stock gets to $65, I'd like to enter a trailing stop of $1. Thank you for your assistance.