Stoploss on the RM-SYSTEM Stock Exchange
The Stoploss intelligent order is intended to automatically follow market developments and make quick reactions to market changes. In the basic version, a Stoploss order searches for a given price and when this price is reached a standard buy or sell order is activated (sent).
A sell order allows a position to be closed when a price drops to the defined level (Stop Price). A buy order allows the timely entry into a position at the moment a price rises to a defined level (Stop Price).
Stop-loss in RM-S is the only intelligent order in the Czech Republic that is directly in the exchanges systems.
Stoploss order parameters
- A Stoploss order is a Czech RM-SYSTEM exchange order.
- Activation of the Stop Price reacts to the last trading price and to the closing price for the day and not based on the bids and offers as on the PSE.
- A Stoploss order can be combined with an EasyClick order.
- Stoploss orders are mainly used for sales (to limit unexpected drops and to fix a profit) but can be used as buy orders.
- This order does not have any additional fees.
You can find more information about the Stoploss order in the pdf file here.
Example of a Stoploss sell order
An investor purchased 200 shares of ČEZ at CZK 900 and is worried that the share will drop below CZK 870, then causing a sell off that will further drop the share price. The investor then decides to limit the potential losses at a level of CZK 871.
- Quantity for sale: 200 shares
- Stop Price: CZK 871
- Limit Price: CZK 868 (minimum sale price, must be less than the activation Stop Price)
Bids and offers when order was placed:
Stoploss order is not in the exchange system and waits until the conditions for activation will be met - a drop to or below the Stop Price.
| Price (CZK) | Cumulative number of shares | |
| 880.00 | 10,547 | Offer |
| 879.90 | 6,218 | |
| 879.80 | 860 | |
| 879.00 | 810 | |
| 878.80 | 152 | |
| 878.00 | Last trade | |
| 878.00 | 85 | Bid |
| 877.00 | 650 | |
| 876.10 | 690 | |
| 876.00 | 855 | |
| 873.60 | 2,050 |
Just before sell order activation:
Sellers outnumber buyers and the stock price drops to CZK 871, which is the activation price for the Stoploss order.
| Price (CZK) | Cumulative number of shares | |
| 874.10 | 1,936 | Offer |
| 873.20 | 1,627 | |
| 872.90 | 1,423 | |
| 871.80 | 423 | |
| 871.00 | 123 | |
| 871.00 | Last trade | |
| 870.00 | 40 | Bid |
| 869.40 | 289 | |
| 867.00 | 891 | |
| 866.10 | 1,524 | |
| 866.00 | 6,789 |
Bids and offers after Stoploss order activation:
Once trading reaches CZK 871, which is our Stop Price, the exchange is automatically sent an order to sell with a Limit Price of CZK 868. The resulting trade is then divided into two. The first trade is 40 shares at CZK 870. The second trade is the remainder (160 shares) at CZK 869.40.
| Price (CZK) | Cumulative number of shares | |
| 874.10 | 1,936 | Offer |
| 873.20 | 1,627 | |
| 872.90 | 1,423 | |
| 871.80 | 423 | |
| 871.00 | 123 | |
| 869.40 | Last trade | |
| 869.40 | 89 | Bid |
| 867.00 | 691 | |
| 866.10 | 1,324 | |
| 866.00 | 6,589 | |
| 865.80 | 6,895 |
