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
Limit order
Day order
Good for day order
Fill or kill order
Limit-on-close order
Limit-on-open order
Market order
Market-on-open order
Market-on-close order
Stop limit order
 

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