Hey, traders. I'm Mike [? Ovacena, ?]
Senior Content Producer here at TD Ameritrade. In this video, I'm
going to show you how to place sell stop orders
on the Thinkorswim platform. Now specifically we're going
to look at three examples. How to open a position and
attach a sell stop order, how to attach a sell stop
order to an existing position, and finally, how to adjust
your price once you have a sell stop order working. Let's jump in and take a look. For our first example,
I'm going to show you how to buy 100 shares of stock
while simultaneously attaching a sell stop order. To do this, navigate to the
Trade tab and type in a symbol. For this example,
let's use Apple. Next, right click your
mouse on the ask price, hover over Buy Custom,
and select with STOP. You'll see that
two orders have now appeared at the bottom
of our screen, both a buy and a sell order,
and the advance order type has automatically been
set to first triggers all. What this means is because
this is a sequence of orders, in order for the second
order to begin working, the first order must fill first. You can see we have an order to
buy 100 shares of Apple stock at a floating limit
price good for the day. Floating meaning
the padlock is open so that the price in
the box is floating with the current market
on the ask price, and the second order
is a sell order to sell 100 shares of stock on
a standard stock market order. Now, let's break this down. A stock market order is an
order that triggers off a price and then sends a market
order to sell shares of stock at the best available
price at that moment. The standard means that the
trigger price will trigger based off of the bid price. If this was a buy order,
the standard stop order would trigger off the ask price. You can change this by
clicking the dropdown here, and if you want
your sell stop order to trigger off the ask price,
you can select that here. The mark price would
trigger it halfway between the bid
and the ask price, so you have some options there
and how you want your stop order to be triggered. So if you wanted to buy Apple
shares, for example, at $320, you could type
that in, hit Enter. You'll notice that the
padlock is now locked and we are no longer floating
with the current market. So in order for us to get
a fill on these shares, Apple stock would need
to go down to 320. You can see our stop trigger
price is, by default, set to a $1 offset. The other thing to notice
this little link button. Currently these orders
are linked together. And what I mean by
that is if I change the price in the
upper buy order, you'll notice that the
sell stop trigger price keeps that $1 offset connected. Now, if we go back
to 320, you'll see that the stop orders at 319. If you simply just want
to do this off of price and you are happy with
the order as is here, you could hit confirm and send. Review the order. You can see your buying
100 shares of Apple at 320 limit to open, and
then the sell stop would be triggered by
the fill of order number one, which you can see here in
the order confirmation ticket. What if you want to get a fill
on the buy order right now? Well, we can change
this to a market order, and you'll notice that
this link is now gone. And we simply have
our price field for this for the
stop trigger, and we can change that back to a
value offset, to a step offset, or simply a dollar offset. Let's do this as
a minus $2 offset. So what will happen
in this order is we will buy 100
shares of Apple at the current price
whenever we send this order. Once we get a fill on
that, a sell stop order will be working at a $2
offset, and we can change that to a good till cancel
order so we know that that order is working. Let's take a look at
what this looks like. We have buy 100 shares of
Apple on a market order to open, and then sell
100 shares of Apple on a stop triggered off of a $2
offset based on our fill price. Good till cancel
triggered by number one, and we're doing this in
our demonstration account. I'm going to hit
Send, and there we've got our fill on
our Apple shares. Now, let's go to the Monitor
tab and look under today's trade activity under the Activity
and Positions page. You'll see that we have a
fill on our Apple shares, but also you'll see
our working order to sell 100 shares of Apple
based off of our stock price. Now, there's that $2 offset. We got filled at 320.54 and
because we put in a $2 offset, we have a 318.54 stop price. So when the bid price
on Apple reaches 318.54, a market order will be
sent to sell these shares and we will get a fill based
on the best available price at that time once this
price is triggered. Now remember, with a
sell stop market order, you are never
guaranteed a fill price. You are only guaranteed
that your shares will fill at the best
available price at that moment. So this means in fast
markets or illiquid markets, there is potential that once
that stop price is triggered, your fill price could be
substantially lower than what your stop price was set
at, so remember that. OK, for our second
example, I'm going to show you how to attach a sell
stop order to existing shares of stock in your account. For this example, we're going to
use this Microsoft position we have in our Demo
account, and you can see we're long 100 shares
which we bought around 136.94, and currently the
stock's trading at 184, so we have some unrealized
profit on this position. So as a trader, maybe you
want to put a stop order in to potentially sell
these shares of stock if we get a sell off
from the current price. Let's imagine we
wanted to put that stop order and right at $180. To do that, we're going
to open our position, right click on the position,
hover over Create Closing Order, and select with STOP. You'll see a sell
order has queued up at the bottom of our screen to
sell 100 shares of Microsoft stock on a standard
stop market order, just as we did in
the previous example. The only difference is
you can see the order type is a single order. We're not doing this
as a first triggers. There's no buy order
in front of it. We're simply going
to put a sell stop order on our existing shares
that we have in the account. First thing we're going
to do is select our price. We said we're going to
put the stop at $180, and let's change that
time enforce to GTC. And once again, when the bid
price on Microsoft hits 180, a market order will be sent to
sell these shares at the best available bid price. Does not mean we'll
get a fill at 180, it just means that
our shares will be triggered to sell once
the bid price hits 180. We're going to hit
confirm and send. Review the order one last time. Make sure we're selling
100 shares of Microsoft on a stop order at 180 trigger. Good till cancelled, and this
is to close our position. Hit send, and we'll
go to our monitor tab, and you'll see now
in our Working Orders we have two working orders. Our Microsoft order
that we just put in to sell our existing
shares, and then you'll also notice our
previous example, which is to sell our Apple
shares that we just purchased. For our last example,
I'm going to show you how to cancel and replace
an existing stop order. Now, let's use the example
we just did with Microsoft. We'll go to our Monitor
page, Activity and Positions, open the Working Order section. You can see both
of our stop orders that we've placed in this
video are still working. We're going to right
click on this order and hit Cancel replace order. This is the same order we cued
up a few seconds ago for 180. Now, let's imagine we wanted
to change the price on this and put it down to
175, type that in. Keep it as a good till cancel
order, hit confirm and send. Go to our monitor
tab, and you'll notice we got our message that
the order has been canceled, and there's our cancel of
the Microsoft sell stop we just put in. And you'll see that
the new stop order has been placed at a price of
175 still good till canceled. Now, what if you just wanted to
cancel one of these outright? Very simple. Let's just use our Apple
example from earlier in the video, right click
that, and hit Cancel order. You'll see that we've
got a message that we've been canceled on that
particular stop order, that sell badge is now gone
from our position, and the only remaining
stop order in our account is the Microsoft order that
we just canceled and replaced. And that's a quick look at
how to place sell stop orders on the Thinkorswim platform. For more investor
education and tutorials, head over to the education
center at tdameritrade.com, and don't forget to check
out all the great content on our YouTube channel. For more in-depth walkthrough
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