Trailing Stop Order

A trailing stop order allows an investor to specify a stop loss limit as a percentage rather than a fixed price. This means that the stop loss limit will always be a fixed percentage below the current rate.

Example: An investor buys a security for CHF 10. Instead of selecting a stop loss limit of CHF 9, the investor uses a trailing stop order with a stop loss limit of 10%. The price of the stock climbs to CHF 13 before plunging to CHF 8.50. The trailing stop order triggers the sale of the stock when its price falls 10% below its highest point of CHF 13, so the stock is sold for CHF 11.70 and the investor makes a profit. If the investor had used a regular stop loss order with a limit of CHF 9, the sale would only have been triggered when the stock’s price hit CHF 9, and the investor would have made a loss.

Swiss stock broker comparison
Order types offered by Swiss brokers compared

About moneyland.ch

moneyland.ch is Switzerland’s independent online comparison service covering banking, insurance and telecom. More than 80 unbiased comparison tools and calculators are available on moneyland.ch, along with useful financial guides and timely news. The comprehensive comparison tools help you to find the right insurance policies, bank accounts, credit and prepaid cards, loans, mortgages, trading accounts and telecom products for your needs.