How do trailing stops work?
thinkorswim does not recommend trailing stop orders, as there is no guarantee that your order will be filled at or near the designated stop price, which is especially dangerous in rapidly rising or falling markets. In addition, trailing stop orders will accentuate volatility in rough markets. A trailing stop allows you to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. A trailing stop SELL (BUY) order is an order where the stop price is set at some fixed amount away from the asset’s bid (ask). If the market price rises (falls), the stop loss price also rises (falls) by this fixed amount. If the stock price falls (rises), the stop price remains the same. When the market moves against the position by the set amount, the stop order is triggered, and is submitted as a market order. For example, XYZ shows a price of 50.00. A customer puts in a trailing stop order to sell at $1.00 below the current bid. A stop order is entered into the syst
