Guaranteed stop-loss explained

A guaranteed stop-loss order (GSLO), available for most products, works in the same way as a stop-loss order except that it guarantees to close out a trade at the price specified, regardless of market volatility or gapping. 

There is a ‘GSLO Premium’ charge for placing a GSLO as you are guaranteed to be closed out at your specified price. 100% of the original GSLO Premium will be refunded if a GSLO is not triggered. This can occur when a GSLO is removed from an open Trade, amended to a regular Stop Loss Order or Trailing Stop Loss Order, when a Take Profit Order is triggered or when an open Trade is closed manually (fully or partially).

The GSLO premium amount to be paid when placing a guaranteed stop-loss order on a trade is calculated as follows: premium rate x number of units.    You can cancel a GSLO or switch to a regular Stop Loss Order or Trailing Stop Loss Order at any time.

The applicable premium rate can be found on the trading platform, in the product overview for the relevant product. 

The premium will be charged when placing the GSLO, including where this is done by changing an existing pending regular stop-loss or trailing stop-loss order to a GSLO. 

The original GSLO premium (100%) will be refunded to you if the GSLO is subsequently cancelled before it has been executed. An additional premium is not required to modify an existing GSLO.

If you wish to place, modify or cancel a GSLO, you need to ensure that you have sufficient available funds in your account to cover any increase in position margin as a result. Failure to pay any GSLO premium due in full may result in your GSLO being rejected or removed.

Guaranteed stop-loss order example

Let's take the UK 100 as an example. You want to go long on the UK 100 and our current sell/buy price is 6694/6695, so you decide to buy one unit at 6695. You are concerned about market volatility, so decide to safeguard your trade by placing a guaranteed stop-loss order at 6650 to limit your losses should the market go against you. In this example, to place a GSLO on your one unit buy trade on the UK 100, the cost is £1 (1 GBP per unit).

An unexpected interest rate cut by the US Federal Reserve causes volatility in the markets overnight, leading the UK 100 to gap by 90 points. The following morning, the UK 100 opens at 6604/6605.

As you had placed a guaranteed stop-loss order, your trade closed out at 6650, resulting in a loss of £45 (6695-6650 x 1).

If you hadn't placed the guaranteed stop on your position, your trade would have closed at the next available price, which in this case was 6605. This means you would have  lost £90 (6695-6605 x 1).

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