Spot Trailing Stops: Tracking Rules, BIPS, and Order Triggers

Summary

This FAQ explains how spot trailing stop orders follow favorable price movement and trigger after a specified reversal. Buy orders track the lowest price after tracking begins and trigger on a rise; sell orders track the highest price and trigger on a decline. The trailing delta is expressed in basis points, with examples showing the conversion between BIPS and percentage changes. Supported contingent order types include stop loss and take profit variants, including an OCO contingent leg.

A stop price can delay the start of tracking until its condition is met; without one, tracking begins at the next trade. The document also describes symbol-specific delta limits and illustrates buy and sell cases with stop-limit orders. These examples clarify trigger mechanics, but the FAQ does not assess strategy performance, slippage, or whether a triggered limit order will fill. One scenario appears truncated or inconsistent, so its examples should be read as illustrations rather than a complete specification.

Key ideas

• Trailing buys trigger after a rise from the lowest tracked price, while trailing sells trigger after a decline from the highest tracked price.
• The trailing delta is expressed in basis points, where 100 BIPS represents a one percent move.
• An optional stop price determines when price tracking starts; otherwise, tracking begins with the next trade.
• Supported order types include stop loss and take profit orders, and OCO orders can use a trailing contingent leg.
• A trigger activates the contingent order, but the document does not guarantee a limit order will fill.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.