Newbie buy/sell stop question

[pander]

Hi

I know about guaranteed stops but what about guaranteed buys? If i place a sell order on gold at 1700 and the price spiked to 1670 would they sell at 1700 or would it be below or at best, or would the order not be executed? The reason i am asking is if I have placed a guaranteed stop at 50 points at the same time for 1750 what would happen there?

Thanks for any info.

 

[NVP]

why would a sell order activate above the price currently reached ?

 

[dealer911]

Hi

I know about guaranteed stops but what about guaranteed buys? If i place a sell order on gold at 1700 and the price spiked to 1670 would they sell at 1700 or would it be below or at best, or would the order not be executed? The reason i am asking is if I have placed a guaranteed stop at 50 points at the same time for 1750 what would happen there?

Thanks for any info.

In this case you would be working a LIMIT order to sell at 1700 - seeing as the market only got as high as 1670 you would have not sold at 1700 - you would have no trade - the market would need to get as high as 1700 or higher - in your example here you would not have traded.

 

[pander]

In this case you would be working a LIMIT order to sell at 1700 - seeing as the market only got as high as 1670 you would have not sold at 1700 - you would have no trade - the market would need to get as high as 1700 or higher - in your example here you would not have traded.

Hi thanks
Finding it a bit difficult to explain,

Say Gold is standing at 1710 now and I have a sell order at 1700 because i am assuming the market is going to go lower then it drops instantly to 1650, where would the order execute?. Would there be slippage on the way down? In otherwords where would it execute if it dropped to 1670 if I had a sell order on at 1700?

Hope this makes sense.

 

[timsk]

Hi thanks
Hope this makes sense.

Hi pander,
Yes, it makes sense. And yes, with a stop buy or stop sell order (as in this case) slippage is a real possibility as they are basically market orders. How much slippage depends upon the spread and volatility of the instrument being traded. If you want to avoid the possibility of slippage altogether, then you need to use a limit order which will ensure that you're filled at the price you specify - or better. For a fuller explanation of these orders - check out this FAQ: What's the difference between Stop Loss and Limit orders?
Tim.

 

[pander]

Perfectly explained and thanks for the links.

Much appreciated.