Hey, traders.
I'm Mike [? Ovacena, ?] Senior Content Producer
here at TD Ameritrade.
In this video, I'm going to show you
how to place sell stop orders on the Thinkorswim platform.
Now specifically we're going to look at three examples.
How to open a position and attach a sell stop order,
how to attach a sell stop order to an existing position,
and finally, how to adjust your price once you have a sell
stop order working.
Let's jump in and take a look.
For our first example, I'm going to show you
how to buy 100 shares of stock while simultaneously attaching
a sell stop order.
To do this, navigate to the Trade tab and type in a symbol.
For this example, let's use Apple.
Next, right click your mouse on the ask price,
hover over Buy Custom, and select with STOP.
You'll see that two orders have now
appeared at the bottom of our screen, both
a buy and a sell order, and the advance order type
has automatically been set to first triggers all.
What this means is because this is a sequence of orders,
in order for the second order to begin working,
the first order must fill first.
You can see we have an order to buy 100 shares of Apple stock
at a floating limit price good for the day.
Floating meaning the padlock is open
so that the price in the box is floating
with the current market on the ask price,
and the second order is a sell order
to sell 100 shares of stock on a standard stock market order.
Now, let's break this down.
A stock market order is an order that triggers off a price
and then sends a market order to sell shares of stock
at the best available price at that moment.
The standard means that the trigger price will trigger
based off of the bid price.
If this was a buy order, the standard stop order
would trigger off the ask price.
You can change this by clicking the dropdown here,
and if you want your sell stop order
to trigger off the ask price, you can select that here.
The mark price would trigger it halfway
between the bid and the ask price,
so you have some options there and how you want your stop
order to be triggered.
So if you wanted to buy Apple shares, for example, at $320,
you could type that in, hit Enter.
You'll notice that the padlock is now locked
and we are no longer floating with the current market.
So in order for us to get a fill on these shares,
Apple stock would need to go down to 320.
You can see our stop trigger price is, by default,
set to a $1 offset.
The other thing to notice this little link button.
Currently these orders are linked together.
And what I mean by that is if I change
the price in the upper buy order,
you'll notice that the sell stop trigger price
keeps that $1 offset connected.
Now, if we go back to 320, you'll
see that the stop orders at 319.
If you simply just want to do this off of price
and you are happy with the order as is here,
you could hit confirm and send.
Review the order.
You can see your buying 100 shares of Apple at 320
limit to open, and then the sell stop
would be triggered by the fill of order number
one, which you can see here in the order confirmation ticket.
What if you want to get a fill on the buy order right now?
Well, we can change this to a market order,
and you'll notice that this link is now gone.
And we simply have our price field
for this for the stop trigger, and we
can change that back to a value offset, to a step offset,
or simply a dollar offset.
Let's do this as a minus $2 offset.
So what will happen in this order
is we will buy 100 shares of Apple
at the current price whenever we send this order.
Once we get a fill on that, a sell stop order
will be working at a $2 offset, and we can change that
to a good till cancel order so we know
that that order is working.
Let's take a look at what this looks like.
We have buy 100 shares of Apple on a market order
to open, and then sell 100 shares of Apple
on a stop triggered off of a $2 offset based on our fill price.
Good till cancel triggered by number one,
and we're doing this in our demonstration account.
I'm going to hit Send, and there we've
got our fill on our Apple shares.
Now, let's go to the Monitor tab and look under today's trade
activity under the Activity and Positions page.
You'll see that we have a fill on our Apple shares,
but also you'll see our working order
to sell 100 shares of Apple based off of our stock price.
Now, there's that $2 offset.
We got filled at 320.54 and because we put in a $2 offset,
we have a 318.54 stop price.
So when the bid price on Apple reaches 318.54,
a market order will be sent to sell these shares
and we will get a fill based on the best available price
at that time once this price is triggered.
Now remember, with a sell stop market order,
you are never guaranteed a fill price.
You are only guaranteed that your shares
will fill at the best available price at that moment.
So this means in fast markets or illiquid markets,
there is potential that once that stop price is triggered,
your fill price could be substantially lower than what
your stop price was set at, so remember that.
OK, for our second example, I'm going
to show you how to attach a sell stop order to existing shares
of stock in your account.
For this example, we're going to use this Microsoft position we
have in our Demo account, and you
can see we're long 100 shares which we bought around 136.94,
and currently the stock's trading at 184,
so we have some unrealized profit on this position.
So as a trader, maybe you want to put a stop order in
to potentially sell these shares of stock
if we get a sell off from the current price.
Let's imagine we wanted to put that
stop order and right at $180.
To do that, we're going to open our position,
right click on the position, hover over Create Closing
Order, and select with STOP.
You'll see a sell order has queued up
at the bottom of our screen to sell 100 shares of Microsoft
stock on a standard stop market order,
just as we did in the previous example.
The only difference is you can see the order
type is a single order.
We're not doing this as a first triggers.
There's no buy order in front of it.
We're simply going to put a sell stop
order on our existing shares that we have in the account.
First thing we're going to do is select our price.
We said we're going to put the stop at $180,
and let's change that time enforce to GTC.
And once again, when the bid price on Microsoft hits 180,
a market order will be sent to sell these shares at the best
available bid price.
Does not mean we'll get a fill at 180,
it just means that our shares will
be triggered to sell once the bid price hits 180.
We're going to hit confirm and send.
Review the order one last time.
Make sure we're selling 100 shares of Microsoft
on a stop order at 180 trigger.
Good till cancelled, and this is to close our position.
Hit send, and we'll go to our monitor tab,
and you'll see now in our Working Orders
we have two working orders.
Our Microsoft order that we just put in
to sell our existing shares, and then you'll
also notice our previous example,
which is to sell our Apple shares that we just purchased.
For our last example, I'm going to show you
how to cancel and replace an existing stop order.
Now, let's use the example we just did with Microsoft.
We'll go to our Monitor page, Activity and Positions,
open the Working Order section.
You can see both of our stop orders
that we've placed in this video are still working.
We're going to right click on this order
and hit Cancel replace order.
This is the same order we cued up a few seconds ago for 180.
Now, let's imagine we wanted to change the price on this
and put it down to 175, type that in.
Keep it as a good till cancel order, hit confirm and send.
Go to our monitor tab, and you'll
notice we got our message that the order has been canceled,
and there's our cancel of the Microsoft sell stop
we just put in.
And you'll see that the new stop order
has been placed at a price of 175 still good till canceled.
Now, what if you just wanted to cancel one of these outright?
Very simple.
Let's just use our Apple example from earlier
in the video, right click that, and hit Cancel order.
You'll see that we've got a message that we've
been canceled on that particular stop order, that
sell badge is now gone from our position,
and the only remaining stop order in our account
is the Microsoft order that we just canceled and replaced.
And that's a quick look at how to place sell stop orders
on the Thinkorswim platform.
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