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Stop loss orders & risk management at Questrade for CFDs

Your expert
Adam N.
Fact checked by
Feb 2024
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Does Questrade have a stop loss order for CFDs as of February 2024?

Good news! Questrade offers stop loss orders for CFDs, providing traders with a crucial risk management tool.

  • Stop loss orders automatically close positions at a predetermined price, limiting potential losses and protecting capital.
  • CFDs' leverage and volatility make stop loss orders particularly important for managing risk.
  • Stop loss orders help traders maintain control over their positions, even when they are not actively monitoring the markets.

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Stop loss order availability
🌐 Web stop loss order
Yes Yes Yes
📱 Mobile stop loss order
Yes Yes Yes
💻 Desktop stop loss order
Yes No No

Data updated on February 5, 2024

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What order types are available at Questrade?

Questrade offers several different order types for web, desktop and mobile users. In the table below, you can find out more about the tools available for their users:

Order types at Questrade
Platform Order types
🌐 Web Market, Limit, Stop-loss, Stop-limit, Trailing stop, Trailing stop-limit, Limit on open order, Limit on close order
📱 Mobile Market, Limit, Stop-loss, Stop-limit, Trailing stop, Trailing stop-limit, Limit on open order, Limit on close order
💻 Desktop Market, Limit, Stop-loss, Stop-limit, Trailing stop, Trailing stop-limit, Limit on open order, Limit on close order

Data updated on February 5, 2024

What is a stop loss order?

A stop loss order is a risk management tool used by traders in various financial markets, including CFDs (Contract for Difference). It is an instruction given to a broker or trading platform to automatically close a position when the price of an asset reaches a specified level, known as the stop price.

Let's say you buy 100 CFDs of Company X at $100 per share and set a stop loss order at $95. If the stock price drops to $95 or below, the stop loss order triggers, and your broker automatically sells your CFDs at the prevailing market price, helping to limit potential losses and protect your capital.

The purpose of this order is to limit potential losses by triggering an automatic exit from a trade when the market moves against the trader's position. When a stop loss order is placed, it acts as a safety net, protecting traders from excessive losses if the market doesn't move in their favor. However, it's important to note that stop loss orders do not guarantee execution at the exact stop price. In fast-moving markets or during periods of high volatility, the actual execution price may differ from the stop price. This is known as slippage. However, there is an order type which prevents slippage, which we will explained a bit later in this article.

Additionally, stop loss orders are not immune to gaps in the market, where the price may jump from one level to another without trading at the stop price. These factors should be considered when utilizing stop loss orders as part of a comprehensive risk management strategy.

If you want to read more about how to utilize this tool, check out this article on stop loss order types at Questrade.

Why is stop loss order particularly important with CFDs?

Stop loss orders are particularly important with CFDs (Contract for Difference) due to several reasons:

  1. Leveraged trading: CFDs allow traders to access markets with leverage, meaning they can trade larger positions than their initial capital. While leverage amplifies potential profits, it also magnifies potential losses. Stop loss orders help manage the increased risk associated with leverage by automatically closing positions if the market moves unfavorably, limiting losses and protecting capital.
  2. Volatility: CFD markets can be highly volatile, experiencing rapid price movements. Volatility increases the potential for large and sudden losses. By utilizing stop loss orders, traders can define their maximum acceptable loss and exit a trade if the market moves against their position, mitigating the impact of volatile price swings.
  3. Availability: CFD markets operate round the clock, allowing traders to participate in various global markets at any time. However, this also means that traders may not be able to continuously monitor their positions. Stop loss orders act as an automated risk management tool, enabling traders to maintain control over their CFD positions even when they are not actively monitoring the markets.
  4. Diversification challenges: CFDs provide access to a wide range of assets, including stocks, indices, commodities, and cryptocurrencies. Managing a diverse portfolio of CFD positions can be complex, and stop loss orders help simplify risk management by allowing traders to set individual stop levels for each position, tailoring their risk protection strategy to each specific asset.

Overall, stop loss orders are crucial in CFD trading as they provide a disciplined approach to risk management. If you are interested in learning more about CFDs, check out this comprehensive article explaining all aspects of trading CFDs.

What is a guaranteed stop loss order and is it available at Questrade?

A guaranteed stop loss order (GSLO), is a specific type of stop loss order that ensures the execution of the order at the exact specified price, regardless of market conditions or price gaps. It provides an additional level of protection for traders, especially in highly volatile markets or during significant news events. Broker usually charge some extra costs for this service.

Unfortunately, guaranteed stop loss orders aren't available at Questrade. However, if you are looking for reliable brokers with a wide range of order types, check out our best CFD brokers article.
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Author of this article

Adam Nasli

Financial Wizard | Trading • Safety • Market Analysis

I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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