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Stop Orders

A "stop order" is defined as an order to buy (or sell) that becomes a market order to buy (or sell) when a transaction occurs at or above (below) the stop price. A "stop limit order" is an order to buy (or sell) that becomes a limit order to buy (or sell) at the limit price when a transaction occurs at or above (below) the stop price. A Stop order is not guaranteed a specific execution price and may execute significantly away from its stop price.

Stop activation conditions for Equity and ETF securities

Equity and ETF stop orders are triggered based on the Last trade price. The Ally Invest order routing system manages the market data triggers for stop and stop limit orders. When the stop order trigger conditions are met the order is released to the market as a market or limit order depending on the stop order type.

A Buy stop order will be released to the market when the Last trade price is equal to or above the order stop price.

A Sell stop order will be released to the market when the Last trade price is equal to or below the order stop price.

Stop activation conditions for Options

Option stop order activation triggers are based on a combination of the Bid and Ask prices as well as a calculation of the Bid / Ask spread tolerance as follows:

  1. If the average of the bid and ask for the option is less than $10.00, the spread between the bid and ask must be $0.50 or less (spread tolerance) for the order to be released to the market.
  2. If the average of the bid and ask for the option is greater than $10.00, the spread between the bid and ask must be less than 10% of the bid /ask average (spread tolerance) for the order to be released to the market

Important note: If the spread tolerance condition is not met the system will continue to monitor the market data until the condition is met prior to releasing the order to the market.

Buy stops on options will be triggered if the ASK price is at or above the stop price AND the option quotes fall within the Bid / Ask spread tolerance described above.

Sell stops on options will be triggered if the BID price is at or below the stop price AND the option quotes fall within the Bid / Ask spread tolerance described above.