Article

How to Use Position Stop Order

okx learn
OKX Learn
2020.08.19

1. What is a Position Stop Order?

A position stop order refers to a stop order specifically placed for a certain position,whose S/L & T/P settings can be queried and canceled on the [ Open Orders] page. After setting the stop-loss and take-profit parameters, the corresponding amount of positions will be frozen in advance.

2.Term Explanation

1. TP & SL trigger price: The predefined condition that will trigger the order. A stop order will be triggered when the market price reaches the trigger price.

2. TP & SL Order price: The price that the order will be placed at if the order is triggered. Users can also choose to place at market price so the order can be placed at the best current price and filled immediately(may not be filled immediately in extreme markets) after being triggered.

3. TP  & SL  : When closing a long position, the TP trigger price should be higher than the last price, while the SL trigger price should be lower than the last price; When closing a short position, the TP trigger price should be lower than the last price, while the SL trigger price should be higher than the last price.

3.How can I take profit & stop loss?

1. Case study

Case1(Close a long position with a conditional order):

User A holds a long BTC contract with an average open price of $9,000 and expects to close a long position to stop the loss when the market price drops to $8,000. Then the user A can place a conditional order according to the following parameters:

【Trigger price】$8,000

【Order price】$7,950( When selling out, a price that lower than the trigger price is recommended to make the order be filled immediately; Market price is also a good choice).

If the price falls to $8,000, stop-loss will be triggered, and a long position will be closed at $7,950. (If the order price is set with the market price, the position will be closed at the market price immediately).

If user A wants to close a long position for locking in his gains, then the position should be closed out at a predefined price that higher than $9,000.

Case 2(Close a short position with a conditional order)

User B holds a short BTC contract with an average open price of $9,000 and expects to close a short position to stop the loss when the market price rises to $10,000. Then the user B can place a conditional order according to the following parameters:

【Trigger price】$10,000

【Order price】$10,050(When buying in, a price that higher than the trigger price is recommended to make the order be filled immediately; Market price is also a good choice.)

If the price grows to $10,000, stop-loss will be triggered, and a short position will be closed at $10,050 (If the order price is set with the market price, the position will be closed at the market price immediately).

If user B wants to close a short position for locking in his gains, then the position should be closed out at a predefined price that lower than $9,000

Case 3 (Close a long position with an OCO order)

User C holds a long BTC contract with an average open price of $9,000. He expects to take profits when the market price surges to $10,000 and to stop losses when the market price dumps to $8,000. Then the user C can place an OCO order according to the following parameters:

【TP trigger price】$10,000

【TP order price】 Select market price (or enter prices like 9,950)

SL trigger price】$8,000

SL trigger price】Select market price (or enter prices like 7,950)

T/P will be triggered if the price pop up to $10,000, and the user can exist the trade at market price instantly (If the preset order price is 9,950, then close at 9,950),meanwhile, the S/L settings will be invalid.

Case 4 (Close a short position with an OCO order)

User D holds a short BTC contract with an average price of $9,000. He expects to take profits when the market price drops to $8,000 and to stop losses when the market price surges to $10,000. Then the user D can place an OCO order according to the following parameters:

【TP trigger price】$8,000

【TP order price】 Select market price (or enter prices like 8,050)

SL trigger price】$10,000

SL order price】Select market price (or enter prices like 10,050)

T/P will be triggered if the price drops to $8,000, and the user can exist the trade at market price instantly (If the preset order price is 8,050, then close at 8,050), meanwhile, the S/L settings will be invalid; S/L will be triggered if the price grows to $10,000, and the user can exist the trade at market price instantly (If the preset order price is 10,050, then close at 10,050),meanwhile, the T/P settings will be invalid.

Position stop order settings and trigger rules

Note:

  1. Positions and margin will be frozen until the stop order is triggered.
  2. The stop order may not be triggered successfully, and the order may fail to be placed due to the factors such as price restrictions, position restrictions, insufficient margin, being in a non-trading status, and system errors. Just like the ordinary limit orders, the successfully triggered limit orders may not be filled. The unfilled limit orders will be displayed in the [Open Order] section.

3. If the order is filled, your existing position will be closed or a new position will be opened. If the order fails to be filled, your position and margin will still exist.

4. When the order is activated as the trigger condition is met, if the predefined order price exceeds the price limit, the system will place the order with the highest or lowest market price at the time of activation.

5. There will be different restrictions on the order amount of single stop – market order for different contracts (the restrictions will be adjusted according to market changes).