Reason behind minimum market stop distances?

[Nexuscrawler]

I get why there are minimum stop distances for guaranteed stops due to market volatility and slippage, but what is the logic behind having a minimum stop distance requirement for normal market stops? If there's any slippage I have to pay for it anyway.

Taking Litecoin (E1) as an example, there's a minimum market stop distance of 1.25 points. If I'm buying 100 Litecoin, that stop would get triggered once I've lost 125€. Is there a reason why I can't have my position closed when it's going down 0.7 points (70€) during trading hours? Why do I have to lose an artificially imposed amount of money before my stop triggers, especially since I myself would not have this limitation if I remained glued to my monitor?

Shouldn't the minimum stop distance just be the size of the spread?

[CharlotteIG]

On 11/01/2020 at 14:42, Nexuscrawler said:

I get why there are minimum stop distances for guaranteed stops due to market volatility and slippage, but what is the logic behind having a minimum stop distance requirement for normal market stops? If there's any slippage I have to pay for it anyway.

Taking Litecoin (E1) as an example, there's a minimum market stop distance of 1.25 points. If I'm buying 100 Litecoin, that stop would get triggered once I've lost 125€. Is there a reason why I can't have my position closed when it's going down 0.7 points (70€) during trading hours? Why do I have to lose an artificially imposed amount of money before my stop triggers, especially since I myself would not have this limitation if I remained glued to my monitor?

Shouldn't the minimum stop distance just be the size of the spread?

Thanks for your question. The reason we have minimum non-guaranteed stop distances in place it to avoid immediate closure. Depending on how volatile the market is will have an impact on where we set the non-guaranteed stop. If we see fast movement, we don't want the market to move out of your favor slightly, you be closed out, then stabalises again. 

I do understand where you're coming from though that it's your money and you should be able to place the stop as close as you want so I will pass this on as feedback. 

All the best

[Guest Fzz]

Hi,

that’s explain why there is a minimum SL. BUT Is there a way to change this ?

thank you 

[Slioch]

Is the reason that the Guaranteed Stop in the CHF is so large (far away from the current price) because of 2015? Are you concern that the Swiss central Bank will do something similar again?