A stop order won't be automatically fired in after-hours trading?
Stop orders and stop limit orders typically do not execute during extended hours after the general market session has closed. Stop orders are market orders and market orders especially are not executed during extended hours. Although there are exceptions because a broker can say one thing and do another thing with the way order types are presented to customers vs what their programming actually does. The regulatory burden is a slap on the wrist, so you need to ask the broker what their practices are. Orders created during normal market hours do not execute in extended sessions, different orders would have to be made during the extended session. Your stop order should execute if the normal market hour price stays below your stop price. So a stop limit would actually be worse here, because a stop limit will create a limit order which may never get hit (since it is above the best bid best ask)
Your order may or may not be executed.  The price of stock can open anywhere.  Often yesterday's close is a good indication of today's open, but with a big event overnight, the open may be somewhere quite different.  You'll have to wait and see like the rest of us.  Also, even if it doesn't execute at the open, the price could vary during the day and it might execute later. The two answers so far are right, but there's a third factor - for many stocks, there's after hours trading. So the official 4PM close is not what the stock's last trade was when they open again. Regardless, even that after hour price is not the starting point as Muro points out. "In US public stock markets there is no difference between the actions individual retail traders are ""permitted"" to take and the actions institutional/corporate traders are ""permitted"" to take.  The only difference is the cost of those actions.  For example, if you become a Registered Market Maker on, say, the BATS stock exchange, you'll get some amazing rebates and reduced transaction prices; however, in order to qualify for Registered Market Maker status you have to maintain constant orders in the book for hundreds of equities at significant volumes.  An individual retail trader is certainly permitted to do that, but it's probably too expensive. Algorithmic trading is not the same as automated trading (algorithmic trading can be non-automated, and automated trading can be non-algorithmic), and both can be anywhere from low- to high-frequency.  A low-frequency automated strategy is essentially indistinguishable from a person clicking their mouse several times per day, so: no, from a legal or regulatory perspective there is no special procedure an individual retail trader has to follow before s/he can automate a trading strategy.  (Your broker, on the other hand, may have all sorts of hoops for you to jump through in order to use their automation platform.) Last (but certainly not least) you will almost certainly lose money hand over fist attempting bid-ask scalping as an individual retail trader, whether your approach is algorithmic or not, automated or not.  Why?  Because the only way to succeed at bid-ask scalping is to (a) always be at/near the front of the queue when a price change occurs in your favor, and (b) always cancel your resting orders before they are executed when a price change occurs against you.  Unless your algorithms are smarter than every other algorithm in the industry, an individual retail trader operating through a broker's trading platform cannot react quickly enough to succeed at either of those.  You would have to eschew the broker and buy direct market access to even have a chance, and that's the point at which you're no longer a retail trader. Good luck!" why not just use a conditional order (http://www.investopedia.com/university/intro-to-order-types/conditional-orders.asp)? Like a one triggers one order? an order like this lets you place a buy order for the stock and if its executed another order is automatically placed. you could choose to let your second order be a stop order. so here's a company that offers stuff like this as an ex. (https://www.tradeking.com/education/tools/one-triggers-other-order) There could be a number of reasons: The price hit your number ($39.70) but by the time your order hit the market, the price had gone up. Perhaps the stock went up between when you placed the stop loss and when the order was executed. A trailing stop loss will ratchet up: Very simply, the trailing stop maintains a stop-loss order at a precise percentage below the market price (or above, in the case of a short position). The stop-loss order is adjusted continually based on fluctuations in the market price, always maintaining the same percentage below (or above) the market price. "One practical application would be to protect yourself from a ""flash crash"" type scenario where a stock suddenly plunges down to a penny due to transient market glitches. If you had a stop-loss order that executed at a penny (for a non-penny stock) it would be probably be voided by the exchange, but you might not want to take that risk." "During market hours, there are a lot of dealers offering to buy and sell all exchange traded stocks. Dealers don't actually care about the company's fundamentals and they set their prices purely based on order flow. If more people start to buy than sell, the dealer notices his inventory going down and starts upping the price (both his bid and ask). There are also traders who may not be ""dealers"", but are willing to sell if the price goes high enough or buy if the price goes low enough. This keeps the prices humming along smoothly. During normal trading hours, if you buy something and turn around and sell it two minutes later, you'll probably be losing a couple cents per share. Outside normal market hours, the dealers who continue to have a bid and ask listed know that they don't have access to good price information --  there isn't a liquid market of continuous buying and selling for the dealer to set prices he considers safe. So what does he do? He widens the spread. He doesn't know what the market will open tomorrow at and doesn't know if he'll be able to react quickly to news. So instead of bidding $34.48 and offering at $34.52, he'll move that out to $33 and $36. The dealer still makes money sometimes off this because maybe some trader realized that he has options expiring tomorrow, or a short position that he's going to get a margin call on, or some kind of event that pretty much forces him to trade. Or maybe he's just panicking and overreacting to some news. So why not trade after hours? Because there's no liquidity, and trading when there's no liquidity costs you a lot." "The question mentions a trailing stop. A trailing stop is a type of stop loss order. It allows you to protect your profit on the stock, while ""keeping you in the stock"". A trailing stop is specified as a percentage of market price e.g. you might want to set a trailing stop at 5%, or 10% below the market price. A trailing stop goes up along with the market price, but if the market price drops it doesn't move down too. The idea is that it is there to ""catch"" your profit, if the market suddenly moves quickly against you. There is a nice explanation of how that works in the section titled Trailing Stops here. (The URL for the page, ""Tailing Stops"" is misleading, and a typo, I suspect.)" Hello All,  I have a question regarding Stop-Loss Orders.   So Bechtle AG announced it would be gifting bonus shares to existing [shareholders](http://www.nasdaq.com/article/bechtle-to-issue-bonus-shares-share-capital-to-double--quick-facts-20170714-00084) , in mid July. Everyone owning a Bechtle stock got a free stock, effectively owning 2.   This brought down the stock from roundabout 120 to about 60 . I was wondering, if I would have had a stop-loss order on a Bechtle stock, would this [50%](https://www.google.com/finance?q=ETR:BC8) drop have triggered my stop-loss order? "You'd have to check the rules for your broker to make sure that the term is being used in its usual sense, but the typical answer to your question is ""no.""  A GTC will execute during market hours.  You would need to explicitly specify extended hours if you want to execute outside of market hours (which your broker may or may not support)." The volume required to significantly move the price of a security depends completely on the orderbook for that particular security. There are a variety of different reasons and time periods that a security can be halted, this will depend a bit on which exchange you're dealing with. This link might help with the halt aspect of your question: https://en.wikipedia.org/wiki/Trading_halt You would generally have to pay interest for everyday you hold the position overnight.  If you never close the position and the stock price goes to zero, you will be closed out and credited with your profit. If you never close the position and the stock price keeps going up and up, your potential loss is an unlimited amount of money.  Of course your broker may close you out early for a number of reasons, particularly if your loss goes above the amount of capital you have in your trading account. I'm a bit skeptical of some of the views the author states, in particular:  &gt; The likelihood of executing a trade at the best price depends on the length of the queue to buy or sell and the incentives to trade. Longer queues lead to longer delays to execute a trade. Delays typically lead to worse outcomes. Quite simply, it makes no sense to wait on a longer line to receive a worse execution.  Why would this be the case? If anything, I'd think that forcing through too many orders at once risks price slippage created by excess supply or demand. He argues that waiting in queue may impair price performance, but I'd think that possible favourable or adverse shifts in the price will average to zero over time.  If this is the case and they do average to zero, then I think funds are doing the savvy thing by putting relatively small, low-priority trades in to the flow at a rate that saves the most money on average. I can see why day traders may not be too thrilled with this, but that is such a small slice of the mutual fund/brokerage clientele.  In the broader picture, funds and brokerages are being squeezed so tightly on expense ratios that I'd think any cost saving/rebates they do get probably filter back to customers in the form of reduced fees. Take Robinhood as an example: they use their trading rebates to provide an extremely low cost trading platform for retail investors. That hardly seems unfair to me.  Any traders care to comment? This is all just speculation on my part and I've not looked at any time series data yet. A stop-loss order becomes a market order when a trade has occurred at or below the trigger price you set when creating the order. This means that you could possibly end up selling some or all of your position at a price lower than your trigger price. For relatively illiquid securities your order may be split into transactions with several buyers at different prices and you could see a significant drop in price between the first part of the order and the last few shares. To mitigate this, brokers also offer a stop-limit order, where you set not only a trigger price, but also a minimum price that you are will to accept for your shares. This reduces the risk of selling at rock bottom prices, especially if you are selling a very large position. However, in the case of a flash crash where other sellers are driving the price below your limit, that part of your order may never execute and you could end up being stuck with a whole lot of shares that are worth less than both your stop loss trigger and limit price. For securities that are liquid and not very volatile, either option is a pretty safe way to cut your losses. For securities that are illiquid and/or very volatile a stop-limit order will prevent you from cashing out at bottom dollar and giving away a bargain to lurkers hanging out at the bottom of the market, but you may end up stuck with shares you don't want for longer than originally planned. It's up to you to decide which kind of risk you prefer. "Are there any known protections against obvious typos in the stock systems themselves? Do you know of stock exchanges which flags or rejects obviously wrong buy or sell orders (e.g., selling something for 0.1% of its highest buy order, or buying something at 1000 times the current sell order)? Does the stock exchange ""community"" have some sort of ""rules of conduct"" for this? Yes and No. Most Stock Exchanges for certain set of stocks have circuit breakers that are more to restrict panic selling or artificial drop in prices. The kind of controls you are mentioning can't be put on individual trades; as stock exchanges are meant to guarantee / provide neutral ground for the price to be determined by demand / supply. There are quite a few companies that have quickly lost value and become worthless with a day or two. Hence it becomes difficult to determine if something is error by an individual or not. Once an order is submitted to the exchange, it can't afford the to and fro to verify ... as even few seconds make a different in volatile markets. The kind of errors reported are difficult for an individual to make as he would not own the kind of stocks and the stock broker will stop the trade from being placed."