Stop orders are never stored at the CME, that's only for limit orders. At least not as far as i know, never came across something like that.
you sure bout that? Stop orders are stored at CME (GLOBEX)12345. There are two types of stop orders: stop-limit, which goes on the book as a limit order when activated, and the stop with protection, which goes on the book as a market order1. Stop-limit orders are activated when an order's trigger price is traded in the market3
Stop Order The stop order type is an order which, when accepted, does not immediately go on the book, but must be triggered by a trade in the market at the price level submitted with the order. There are two types of stop orders: stop-limit, which goes on the book as a limit order when activated, and the stop with protection, which goes on the book as a market order.
According to GPT: What Happens to Stop Orders in a CME Velocity Event? If the Stop Order Triggers Before the Event: Once triggered, a stop order becomes a market order (or a limit order if it's a stop-limit). Since market orders are canceled during a velocity event, a triggered stop-market order would be removed from the order book. This means it does not remain pending during the event. Instead, the trader must manually re-enter the order after trading resumes, unless an automated system replaces it. If the Stop Order Has Not Yet Triggered Before the Event: The stop order remains active but untriggered. Once the market resumes, if price moves to the stop level, the order will then trigger and execute at the best available price. If liquidity is poor post-event, the execution price could be much worse than expected, leading to slippage. What Likely Happened: During the Velocity Event: If the stop order was not yet triggered, it remained active but dormant. The event paused matching and canceled some orders (e.g., small market orders) to stabilize price movement. No executions happened during the pause. Once Trading Resumed: The first tradeable price might have been far beyond the stop price. The stop order triggered at the first available tradeable price rather than the original stop price. The Stop Logic Functionality (protection points) may not have engaged because it only applies in cases of rapid cascading stop orders before a Velocity Logic pause occurs—not after a market resumes trading. Why Protection Points Didn’t Prevent a Worse Fill: Stop orders don’t guarantee execution at the stop price—they only turn into a market (or limit) order when that price is hit. Protection points apply dynamically before stop execution, but they don't apply after a velocity event pause, because the stop was never "in the process of executing" before the event. When trading resumed, your stop triggered at the next available price, which was significantly worse due to the liquidity vacuum post-event.
Correct. IT is stored on cme as a price level to then be activated and put into play when price level is reached. It just is not on the books as an actual order until that happens. It is on the book as a price level. So does this mean in the case of an velocity logic event the SL is not activated until the event is over?
Does this then mean if it had been a limit stop order then once trading resumed it would be activated as such and but not filled a a worse price than specified by the now active limit order? If so would that be the way to be protected from a SL order being filled at a lower price than specified by the limit order SL? So when the event was even if price at that time was 100 points lower the limit SL order would be on the book but not executed until price returned to it or above it in the this case since the OP 4 contract trade was a long trade and the SL would have the offsetting trade.
From what I can tell: If you have an open position and are on the wrong side of a velocity event, without some type of hedge, you can't protect yourself, all you can do is use a stop-limit instead of a normal stop. A stop-limit wouldn't cancel during the event and it wouldn't fill at a worse price; however, you would be left with an open position with serious drawdown. And like I said before, if your account couldn't handle the drawdown, the broker would probably close your position and you would owe them a lot of money.
Yes but if the account was big enough to handle the DD then one could resort to whittling down vs taking the loss. Now the question remains if this were not some temporary velocity logic like in the OP situation but a real flash crash that subsequently ended in minutes and price afterwards went right back back up but trillions where lost on regular SL orders being turned into market orders and executed is that why and what this dynamic circuit breaker (velocity logic) was designed to mitigate? To avoid a Knight situation like I posted earlier. Or some earlier flash crashes. Looking more like a triple inverse etf might be a viable way to mitigate losses from such events. And if the OP had had one in play would it had been a full hedge for his long position? Something to think about and let twirl around in the Ole noggin. Where is handle123 when we need him?
I don't know much about hedging, but I suspect it's not affordable, nor feasible, for the average retail trader. If your account could handle the drawdown, you would at least have some time to think about how to react.
No, it is stored on your local device or the brokers server until the price is reached, not at the CME, then it is send to the exchange as either a market order or limit order.