What is Take Profit/Stop Loss Order?

Take Profit/Stop Loss Order is an order type used to exit an existing position. If one of the orders is filled, the other is cancelled automatically.

• A stop-loss order is designed to prevent further losses on an existing position once the futures contract price reaches the stop price, at which point a market order is executed. Stop orders do not guarantee specific execution prices.

• A take-profit order is used to protect profit on an existing position once the futures contract price reaches the limit price. Different from the stop-loss order, a take profit order attempts to execute a limit order at the limit price or better. Limit orders do not guarantee execution.

How to Use Take Profit/Stop Loss Order on Futures Trading?

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You can place a Take Profit/Stop Loss order on your existing positions.

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Or, you can use a group order to open a new position:

• Limit + Profit/Stop Loss Order
• Market + Profit/Stop Loss Order

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In summary, Take Profit/Stop Loss Orders help traders to close their positions at a pre-determined price. A target price should be set in both Take Profit Orders and Stop Loss Orders. When one of the orders is filled, the other order will automatically be cancelled.