Sell Stop: Market or Limit Order?

Discussion in 'Order Execution' started by ProTrader432, Jul 11, 2013.

  1. Hi

    I got a question about Sell Stop order execution in a retail ECN FX Spot environment. Let's assume that the current EUR/USD Price is at 1.2308, and I enter in a Sell Stop order at 1.2304 as seen in the following screenshot. Then, suddenly the price immediately falls down from 1.2308 to 1.2301:


    So I got four questions about this order:

    1. This sell stop order, is it handled by the broker as a market order, which means that as soon as 1.2304 is reached the order will be released as a market order, or is it handled as a limit order, meaning that the order will be visible in the order book?

    2. If it is handled as a market order, my concern is that a) In a fast moving market the order might be filled at a much worse price than I initially entered it or b) the order might not be executed at all

    3. If it is handled as a market order, is it possible to enter the order as a limit order which is available in the orderbook meaning that the order is guaranteed to be executed at 1.2304 no matter what happens?

    4. Are there differencies between Spot FX and FX Futures regarding this matter?

    Thanks in advance