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Guaranteed Stop Loss
Financial Spreads now offers Guaranteed Stop Loss orders.
Until now, clients were able to speculate on the financial markets knowing that their trade was protected by a Stop Loss. A Stop Loss order will still be available, and will be automatically added to all trades with the firm, however now, for added security, Financial Spreads are also offering Guaranteed Stop Losses.
Guaranteed Stop Loss Orders
As mentioned, Financial Spreads already offer Stop Losses, however regular Stop Loss order do not guarantee the point where your trade will be closed if the market gaps.
For example, let's say that you buy the FTSE 100 at 5,800, and you set your Stop Loss at 5780. Should the UK index 'gap' and fall to 5770, then your trade would be closed at 5770, rather than at 5780.
This is because the stock market index didn't trade at 5780, and therefore the firm didn't offer the price level. The next available price that was offered was 5770, and therefore your trade would be closed at that level.
Let's take the same example, however instead of filing a regular Stop Loss order at 5780, you apply a Guaranteed Stop Loss order at the same level.
If the UK market were again to gap and drop to 5770, your trade would be closed at 5780, as your order was 'guaranteed'.
Note that as Guaranteed Stop Orders are a form of insurance against market gaps they come at a small extra cost:
- There's a small premium you have to pay for selecting your mandatory Stop to be guaranteed
- The order needs to be placed further away from your entry level than if it was a non-guaranteed Stop.
Guaranteed Stop Loss
Adam Jepsen, spokesperson for Financial Spreads, says that the new function will allow clients to trade with greater confidence. "We've been working hard and have a major new addition on our trading platform: guaranteed stops," he said.
"We take our customer feedback seriously and are very pleased to announce we are rolling these [Guaranteed Stop Loss orders] out due to popular demand.
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"Guaranteed stop orders enable you to trade with complete confidence that you will be protected against any market gaps or slippage by being filled at the price level you have specified."
Financial spread trading carries a high level of risk to your capital and you may lose more than your initial investment. It may not be suitable for all investors. Only speculate with funds that you can afford to lose. Please ensure you fully understand the risks involved and seek independent advice where necessary.
Financial Spreads Account
Also see:
About Financial Spreads
Investors can speculate on equity markets, stocks, forex rates, commodity markets, interest rates and bonds both over the phone and online via FinancialSpreads.com.
The spread trading service, which is commission free, allows spread trading account holders to speculate on financial markets to go either up or down and includes access to a range of charts and research data.
Based in London, Financial Spreads is a trading name of London Capital Group (LCG) which is authorised and regulated by the Financial Services Authority.
Original press release: 27 January 2011
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