A lot of clients really enjoy bracket orders as a way to set exit points, both profit and loss exits for their stock positions.
So on the position page if we right click on our line that is our Ford stock you can select add a bracket or add bracket to F. That's going to pop up the new screen here for us. This is where we can actually put the order in that we are looking to execute to exit the position.
So here you can choose your starting price for any profit or loss exit. You can use the bid ask, or the last, in this case the difference is about a penny, or you can select other, and you can choose your own starting price.
Most folks, really there's not necessarily any better or worse selection here.
You're really just saying this is the target that I want to base the following information off of. So, we'll then indicate our quantity.
So, we've got 10 shares so maybe we want you have a bracket on all ten shares. And then we can add any or all of these three different choices.
So, we can do a profit exit. And if we checked that box, we can do points or we could do percentage or we can do price.
Price I think is the easiest one to think about. Price says if we hit this target price, I want to sell my stock.
So, stock is trading at twelve seventy three. Maybe I want my price to be thirteen dollars.
If we type thirteen in there, you'll see it will show that estimated price that we would place our trade at thirteen dollars.
If we change it to percentage then we will type in this profit exit box the percentage that we want the stock to move. If we still want thirteen percent, that's certainly a viable choice. That means that the stock is going to go to fourteen-thirty-eight. This estimated price section is very helpful because it will update as we make any changes, which can make it a lot easier to make sure that you're placing a trade that you to.
We can also do points. So, if we were to do points in this, that would mean that we want the stock to move thirteen dollars before we sell.
So, our estimated price becomes twenty-five seventy-three.
The same works for trailing stop and stop loss exits. Pretty much the same idea on those.
If we look at stop loss exit. These are going to be on the downside right.
So if the stock goes down by a certain number of points or by a certain percentage or down to a certain price, I would like my stop loss order to be triggered.
A reminder about brackets, they are triggers for market orders. So, a profit exit is not a limit order and a stop loss exit is not a stop limit order.
Therefore, what happens if the stock were to hit our twenty-five seventy-four price point on the profit side, that's telling the system to send a market order to the floor so you're going to get the next available price, whatever that price is. It could be twenty-five seventy-four, it could be twenty seventy-four. That is a little bit dramatic of course, but it certainly could be less than you're anticipating since it is a market order and you get the next available price
Learn how to use bracket orders to set profit and loss exits.