Who offers Stop losses on Stocks/shares ISA

roadster198

Having just moved to Bestinvest I've only just found out that they don't offer stop losses. I know I should've checked prior to swapping however it's only recently that I fancy buying individual shares.

My questions is does anyone know what companies offer the stop loss feature so I can eventually move to them.

Thanks

MoneySaverLog

Hargreaves Lansdown will apparently let you set a stop loss. Personally I don't have them set for the ISA as don't want to get whipsawed and I'm in for the long haul anyway.

IronWolf

Saxo Bank

Also if any broker allows you to put in a limit order then you can use it to set a stop loss.

MoneySaverLog

IronWolf wrote: »

Also if any broker allows you to put in a limit order then you can use it to set a stop loss.

How does that work in terms of buying the stock? I could understand using a limit order to get into a stock but when it comes to selling I thought limit orders are effectively the limit for a take profit.

e.g. Current Price is say £5
Limit Order at £6 to take profit

Current Price is £5.50
Order to buy on a limit order at £5 (as not prepared to pay anymore for the stock)

The only time I've come across the way of using a limit as a stop loss is if selling a stock short, but this is not available in a ISA as far as I am aware.

Shaolin_Monkey

A stop order is different from a limit order and it's important to understand the differences. A stop order becomes a market order once it's triggered. For example, if you have a stop loss on some shares at £2.00, and one morning after dire news the share opens sharply down at £1.50 the stop loss is triggered and the broker will sell immediately at whatever price is available. It could be even lower than the opening price and certainly well under the £2.00 that the stop loss was set at.

A buy stop order (less commonly available) on the other hand would be set to buy a share if it went above a certain price, and might be used by momentum investors/traders.

A limit order won't be filled unless they can completely fill your order at the price you want (or better). A limit sell (assuming no short selling allowed) would be used as a 'take profits order' and a limit buy would be used when you want to buy into a share at a lower price than the market is currently offering. They are not really suitable for stop losses.

I know TDDirect and Hargreaves Lansdown offer various order types.

jimjames

Alliance trust offer limit orders for buy & sell.

MoneySaverLog

Yes I'm aware that you can have a limit order to buy and a limit order to sell (when taking profit).

I am also familiar with stop orders (different to stop loss) to confirm a change of direction in the market, say when the price drops to a certain level and I want confirmation that the market has changed direction before buying into that market.

But I am not aware of a limit order that can be used as a stop loss on a buy order.

IronWolf

MoneySaverLog wrote: »

How does that work in terms of buying the stock? I could understand using a limit order to get into a stock but when it comes to selling I thought limit orders are effectively the limit for a take profit.

e.g. Current Price is say £5
Limit Order at £6 to take profit

Current Price is £5.50
Order to buy on a limit order at £5 (as not prepared to pay anymore for the stock)

The only time I've come across the way of using a limit as a stop loss is if selling a stock short, but this is not available in a ISA as far as I am aware.

Yes sorry I meant stop order

bowlhead99

Shaolin_Monkey wrote: »

A stop order is different from a limit order and it's important to understand the differences. A stop order becomes a market order once it's triggered. For example, if you have a stop loss on some shares at £2.00, and one morning after dire news the share opens sharply down at £1.50 the stop loss is triggered and the broker will sell immediately at whatever price is available. It could be even lower than the opening price and certainly well under the £2.00 that the stop loss was set at.

I know TDDirect and Hargreaves Lansdown offer various order types.

There are a few variations on the theme across different brokers. With TD Direct, the stop loss functionality is a basic one, exactly as you describe and you could experience losses bigger than you wanted.

With Sippdeal, a stop loss order has two parameters, a trigger price and a bottom price. So it might trigger when the market goes under 2.00, but you might have set the bottom price you'll accept as 1.90 in which case it won't execute at 1.50. This could be an advantage (if it recovers to 1.90 tomorrow) or a disadvantage (if it goes to 1.30 tomorrow and keeps going down).

With TD Ameritrade (a US broker) they have a range of more exotic order types including trailing stops (which follow the price up, a few percent or a few dollars behind it), or contingent orders (place a limit order to sell this, but only after you've executed a stop buy order to buy it...).

The more fancy order types are less common from mainstream mass market brokers in the UK. I'm surprised TD Direct's options aren't wider, as on the buy side they have good dealing features (eg outside an ISA you can buy on credit with extended settlement days ie t+20 instead of t+3 and close it out at a different price nearer the deadline without ever taking delivery)

One option if you wanted a guaranteed stop is to be participating in share price movements through a spread betting firm like IG Index. They can guarantee that if you wake up in the morning with the price at 1.50 they'll cash you in at your 2.00 stop level, but there is a price for that in terms of extra spread when buying, versus a regular order with them. Obviously spread bet firms might be less appropriate for a buy-and-hold investor but they are tax free and can have advantages for more volatile or short term holdings.

I have accounts with all those 4 firms and would recommend any of them (TD Ameritrade obviously less suitable for someone based only in UK and dealing UK shares)

Ifts

roadster198 wrote: »

My questions is does anyone know what companies offer the stop loss feature so I can eventually move to them.

The Share Centre: https://www.share.com/ offers -

Buy / sell limits - Stop-loss limits - Tracking stop-loss limit - Limit safeguard