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Conditional orders are instructions that you give us based around a set of criteria or market conditions (referred to as a "trigger") that must be met before your order is actually submitted by us to the market for execution. When the trigger criteria specified by you is satisfied, we will submit your order to the market, subject to our trading terms and conditions. However, there is no guarantee that your order will trade. Please refer to "What are the risks of conditional orders" and "What does processed mean".
Conditional orders have two components. The first component is the criteria which you specify as the trigger criteria. The second component is the price at which the order is to be submitted to market, once the trigger criteria are satisfied.
A common example of a conditional order is a "stop-loss" order, which is a conditional order to sell a stock if the market falls below a particular price level.
We will let you know when your order is triggered and/or executed by sending you an email.
No, if you have a conditional order to buy stock, we do not put a hold on the funds and you can use them to buy and sell other stock. We will, instead, check your funds at the time the conditional order is triggered, as explained in the next section.
All trading through us is subject to our Terms and Conditions, including the provisions which specifically relate to Conditional Orders. You should read and ensure you understand our Terms and Conditions and the provisions which relate to conditional orders. Our Terms and Conditions include provisions which cover placing conditional orders, varying and cancelling conditional orders, what happens when the conditional order is triggered and our rights to refuse to place orders and to cancel orders and transactions in certain circumstances.
Market conditions may result in a conditional order not being triggered, or being triggered in circumstances where you would prefer the order is not triggered. Some examples are set out below.
Short term price fluctuations either upwards or downwards may cause your order to trigger and trade before the price recovers to its previous level. For example, in the case of a stop-loss order, whilst this limits your downside risk it may cause you to miss out on the upside profit gain.
Also, in the case of a stop-loss order, when a stock price falls rapidly the limit price of your order may be higher than the market price being offered when your order, having been triggered, is placed onto the market. This may mean your order will not be executed at the price you have set. Of course you can amend your order just like any other order.
Finally, even if the market conditions specified in the conditional order are met there is still no guarantee that your order will be executed, for example there may not be adequate liquidity in the market for your order to be executed completely, or an order may be rejected in accordance with our Terms and Conditions.
A conditional buy order enables you to specify a price at which you wish to enter the market.
You may wish to place a buy order when there has been upward movement in the stock price. For example, XYZ trades in a range of $2.30 to $2.60 and although you expect it to appreciate above $2.60 you don't wish to hold the stock while waiting for that upward trend. You can set a market condition that when XYZ trades at or above $2.70, place an order to buy XYZ at $2.75.
A conditional sell order helps you limit any losses or protect any gains.You may have an unrealised profit on certain stock that you don't want to lose should the price fall. You can set a conditional order to sell the stock if its price drops and your profit starts to erode.
For example, you may have bought stock XYZ at $10.60 and be unwilling to hold it if the price fell to $10.00. You may consider placing a conditional order to Sell XYZ at $10.00 if XYZ trades at or below $10.01.
You can place both a stop-loss (where the price falls below the target) and a take-profit (where the price rises above the target) at the same time. If one order is triggered, the other will be cancelled. This is sometimes called a “one cancels the other order”.
A linked order consists of a buy order (the entry order) and one or more conditional sell orders (the exit order(s)). When the buy order has been completely filled, the conditional sell order(s) become active. The quantity for the sell order(s) will be the same as the quantity which was bought in the buy order.
A trailing take profit allows you to benefit from a rising market with protection from a decline over and above what you consider a normal fluctuation. You will set a trail price and a trail amount. When the stock trades at or above the trail price, the conditional order will be activated, with a trigger set to the last sale price less the trail amount. The trigger price will now rise with the market, similar to a trailing stop loss.
You bought XYZ at $10.60. You would want to sell it the price rose to $12.00, but you would also like to lock in any gains over $12.00. You also feel that a normal, or acceptable, fluctuation in XYZ’s price is 50c over the course of a day. You set a trailing take profit order with a trail price of $12.00 and a trail amount of $0.50. When the stock price hits $12.00, the conditional order is activated with a trail of 50c, so the initial trigger price is set at $11.50. As the price rises, the trigger price rises with it, but if the price falls to or below your trigger price, the conditional order will be triggered.
A conditional order can be marked as "active" or "inactive". A conditional order will be marked as inactive if the market for a stock is purged by the ASX due to certain corporate actions in respect of a stock.
For example, when a stock goes ex-dividend (this is where the issuer of the stock will pay a dividend or distribution only to those who are registered holders of the stock as at that ex-dividend date), the ASX purges all orders from the market. Often, the stock is expected to trade at a lower price immediately after going ex-dividend, so any conditional orders will be marked inactive in this case to prevent them triggering on a price that is lower due to the stock going ex-dividend. You will be sent an email notification when this occurs, and can then amend and re-activate the order, or cancel it and resubmit with a different trigger price, if appropriate.
Other corporate actions that will cause a conditional order to be automatically marked inactive include when a listed entity starts trading; ex-bonus, ex-capital return, ex-entitlement (rights), ex-interest payment, ex-rights, ex-priority, reconstructed, a name change or warrant rollover.
A conditional order in respect of the stock of a listed entity could also be marked inactive under the following circumstances:
For more information on the circumstances in which ASX will purge unexecuted orders, you should refer to the ASX education website.
Conditional orders will not be triggered when they are marked as inactive and we may cancel any conditional orders which have remained inactive for more than 1 month.
There is no cost to place a Conditional Order. The only charge involved is brokerage on any order that is executed as a result of a Conditional Order being triggered.
Provided the conditional order has not triggered, you can cancel the conditional order online. Click on ‘Open Orders’, select the ‘Conditional Order’ and click the ‘Cancel’ button. Then enter your trading PIN and submit the cancellation.
If the Website is not available, you may contact a dealer who can cancel the Conditional Order for you.
Whenever the conditions specified for a conditional order are satisfied, the conditional order is triggered and will be sent to our Straight Through Processing (STP) system. Our order processing system uses a series of automated filters. Orders arising from the trigger of conditional orders are treated in the same way as any other orders and are therefore subject to our automated order filters. Orders which pass all of these filters are sent straight to market without further human intervention. Orders that do not pass all filters may be rejected or may be sent to one of our dealers to consider. The dealer may submit the order to the market or may reject the order, in accordance with our trading terms and conditions.
In other words, it is important to note that merely because a conditional order triggers, an order will not always be submitted to the market. Orders arising from conditional orders may pass or fail our system's filters, as with any order.
No, if you have a conditional order to sell stock, we do not put a hold on your stock, and you can still sell your stock as normal. We will, instead, check your holdings at the time the conditional order is triggered, as explained in the next section.
Note: At all times you will need to comply with the short selling regulations as set out in the Corporations Act 2001 (Cth) (and regulations made under it) and also the ASX Market Rules, as those regulations may be amended from time to time. You will be taken to have represented that any sell order submitted as a result of a conditional order constitutes a long sale for the purposes of Australia's short selling laws.
When a sell order is triggered, the system will check your available stock. If you do not have enough to cover the order, the volume being sold will be adjusted to whatever is available to sell. Note that we will never sell more than you originally requested.
For example, you have a conditional order to sell 1,000 XYZ if the price reaches $8.00. When you placed the order, you had 1,000 XYZ shares. After placing the conditional order, you asked a dealer to sell 200 XYZ shares for you. Now, you have 1,000 registered shares, but an open sell order of 200, so will have 800 “available to sell”.
When the price of XYZ hits $8.00, your conditional order will check your available holdings, and will recognize that you only have 800 shares available, so will place an order to sell 800 shares. This will be the case whether your later order in respect of the 200 shares has been executed or not. However, if it has not been executed, you may choose to cancel all or some of the later order in respect of the 200 shares, in which case any shares remaining after such cancellation will be available to fill the conditional order (i.e. if you cancelled the entire later order to sell 200 shares, you would then have the full 1,000 shares available for the conditional order when it is triggered).
As another example, imagine that after you placed the conditional order to sell 1,000 XYZ shares, you then bought another 500 XYZ share, so you now hold 1,500. When then conditional order triggers, we will only sell 1,000 XYZ shares– we will never sell more than the volume specified within your conditional order.