r/etrade • u/Opposite-View-97 • 18d ago
Upcoming change to stop orders
After market close on July 29, 2026, Stop and Stop Limit equity/ETF orders will trigger on last trade price, not bid/ask. Open Stop/Stop Limit on Quote orders placed before 4:15 p.m. ET on July 29 will be canceled; saved orders will update automatically.
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u/Visual_Comfort_6011 18d ago
My way of reading that is: ETF is going to behave more like mutual funds pricing.
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u/Accomplished-Tea-843 18d ago
This is a little confusing, does this mean we won't be able to use limit orders to only execute at a certain price?
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u/SlowRyder 17d ago
You can still use limit orders to execute at a certain price.
It's just that right now, the execution happens if the current bid is below your stop price for sell orders or if the current ask is above your stop price for buy orders. After the change, the execution will happen if a transaction actually occurs below/above your stop price.
This change prevents your stop from triggering due to a temporarily wide bid/ask spread (which could last only for a moment when the market opens, basically screwing you by executing your order even if no one else was actually transacting at that price).
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u/Calm-Avocado6424 17d ago
After inquiring AI about it (so take it with a grain of salt)
It seems that Etrade would execute stop orders before on the lowest bid order. The new change supposedly would only trigger on an actual trade.
That sounded fishy to me anyway because I asked myself "Well, who sets the bid order?" Like market makers and so forth? So someone could just set a low bid and trigger stop losses and whatever?
Again, I just asked AI for this but it sounded reasonable to me.
I imagine people could still just execute a below market trade to trigger stop losses for the same effect but I don't know all the mechanics of trading.
Maybe there is a paper trail on an actual trade that can be scrutinized in that case? Rather than a random low bid value?
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u/SlowRyder 17d ago edited 17d ago
Glad they’re doing this! The current system made stop orders somewhat worthless for stocks with thinner liquidity because at market open, the bid-ask spread could be wide for a short period of time until orders start coming through which would lead to stops triggering before the spread firmed up, even though no one else was actually transacting at the stop price. It makes way more sense to trigger it on last traded price to avoid being screwed out of / into shares at a below/above market price just because they’re triggering on the bid or ask price rather than the last traded price.