https://www.prorealcode.com/topic/costs-are-killing-me-2/page/2/#post-257245 :
justisan wrote: from cfd-“world” I am missing mostly “guaranteed stoploss” with futures – since some of my algos carry positions over weekends and exchange holidays. if somebody has an (proven) idea/method how to make a “synthetic” guaranteed stop for futures – I would very much appreciate an advise!
I am eager to learn what this is all about. … I won’t say that I don’t recognize anything of it, but what you seem to state is :
When you have a position over e.g. the weekend and a gap crosses your SL for an “unaccepted” amount, you get the market price of the open price. Do I have this correct ?
And to start the discussion somewhat : what I recall from manual trading is that with too low volatility (e.g. at 5am for DAX) it can be better to have a Market Order than a Limit Order because the Limit Order will/may never meet anyone’s price.
And since Stop Loss Orders are actually Limit Orders (or Stop Orders), it would come down to the same : if no-one throws a Market Order at you, the price goes more and more away from what you intended.
But notice the emphasis in the paragraph above; if there’s a Limit Order waiting for you at the wrong side of the price you want (like 20 points lower than the opening price – you being Long) then the Market Order was not the best idea also …
Regarding this, notice that these matters can be seen in PRT (you would be able to see Bid and Ask) but this does not help your Autotrading.
hi Peter,
I am afraid I might explain you something obvious, but I understand that you don’t know what guaranteed stoploss is? if so: this kind of stoploss guarantees that your cfd position will be closed at exactly the price you have set as guaranteed stop level if price moves against the position, does not matter how big the gap is against the position, does not matter how fast the market moves. this is not for free, but the fee which IG charges is for me totally acceptable considering the risk of gaps which in reality take place. one can use it also with automated trading.
I have no clue how IG and other cfd brokers can make it possible. I just thought it would be great to have exactly same or at least similar for my futures trading. after some research it looks to me like it is totally impossible to replicate exactly such “guaranteed stop” outside of cfd-world. I just have some ideas for something similar: maybe using options contracts, obtaining long+call for a weekend only, so hedging against vola, or maybe taking for a weekend opposite treasuries position (so like short bonds if I keep long position in dax).
but I never traded options, so have no clue if that might work and what’s the price and what’s the real benefit from such activity. would need input from others and much more my own research.
cheers
justisan
IG can offer this type of service because they create the market and their own data; therefore, for a fee, you can ask them to execute orders at predefined levels, also known as “guaranteed stops.” I assume they always come out ahead, given the number of orders that will be executed before the guaranteed stop, which was requested and thus paid for by a multitude of clients multiplied by a multitude of orders (due to take-profit orders, manual closures, etc.).
