Stop Loss Minimum Distance

[Guest Mirko]

Is there a reason why a large percentage of the shares available to trade have an absurd 2% minimum stop loss distance?

It makes trading on small time frames basically impossible without opening yourself to an unacceptable Risk/Reward Ratio. 

 

[CharlotteIG]

On 13/05/2021 at 10:26, Guest IG on MT4 said:

STILL NO ANSWER!???

 

On 30/10/2020 at 19:38, Guest IG is **** said:

Woke up this morning, minimum stop loss is 280 pips, WTF IS GOING ON?

 

Hey all, 

The minimum stop distance is variable and can change. This is due to volatility in the market and our risk teams analysis. We constantly assess the market and adjust minimum distances accordingly. 

With normal stops we put minimum distances in place which we find appropriate for the volatility. If you're trading on a volatile market and put a stop 5pts away you will likely be closed very fast, We don't want traders wasting their money being closed our due to volatility. 

With regards to guaranteed stops we assess them based on volatility but IG are taking on risk when traders open these as we have to take on the loss if the market gaps through the stop. 

If you have any other questions about this please let me know 

[DannyDeg]

Totally agree and have asked the same question myself.. Looking at Apple CFD right now - minimum stop 11%!

One of the largest caps in the world, practically un-tradable.

[DannyDeg]

I imagine it has to do with it being a 'guaranteed' stop on a limited risk account (have just emailed support to ask). Otherwise I see absolutely no reason for a minimum stop distance at all. If I were to monitor the trade manually I could market sell at any price - which is all a stop loss is doing.

[Guest Gunter]

Any answers to this yet?

[strapper]

My minimum stop distance for US indices just jumped to 2%, just today. Why such a jump? It used to be only a few points!

[osaretin1]

I trading using the share dealing platform I am trying to do a stop loss for my trades read you can do that putting in a sell order at the price you want to initiate the stop loss. Am I wrong this is what i got online please see below 

•  

Posted February 22, 2018

Hi  - thanks for your question on share dealing and stop losses. Although you can't specifically add a stop loss on the same deal ticket, you can manually set up the functionality so that when the market moves down, the order will execute to get out of your position. You can also set up a 'limit' to take profit as well. There is a walk through of this below:

 

How to set stop losses on share dealing

 

1. Lets say you have an open position of 5000 BARC shares which you have bought at 205p.
2. You want to sell half, or 2500 shares, if the market moves to 180, and then the other half at 165.
3. You would simply open a new deal ticket and fill it in as follows. 

Stop market sell order for 2500 at 180. The GTC stands for 'good til cancel' rather than just the day order which will be deleted at the end of the trading day. 

[strapper]

And today it is back to the normal of only a few points...???

[AndrewNat]

I'm struggling with this too. All FTSE shares are requiring 2% minimum stop loss making it stupidly risky for day trading. Is this common on the IG platform? If so, is there  a way to get around this? Maybe placing a contra trade at the preferred stop price to net off the original order?

[Guest IG is ****]

Woke up this morning, minimum stop loss is 280 pips, WTF IS GOING ON?

[Guest IG on MT4]

STILL NO ANSWER!???

[Xia]

It is false logic that IG claims this protects users. All it does is force an even larger loss than we might have been exposed to if we chose it ourselves, and is likely driving high revenue to IG. I will be moving to a new platform due to this issue.

If IG really wanted to protect users, they could recommend a stop loss based on volatility but allow us to choose where we place it.