Stop triggers and opening-only short market orders

A trigger is not a fill

A stop-loss is a price trigger that, once hit, launches a market-order so a loss or exposure decision can be bounded before entry and while the position is open. A stop order is only a trigger. When its price is reached it launches a market-order rather than guaranteeing a fill at the stop price.

A market-order is an instruction to trade at the next available price after submission or after a stop trigger, so fill quality depends on the book, spread, volume, auction, and trading costs.

Slippage after the trigger

After a stop is triggered, the resulting market-order can fill at the next available trade, which may be away from the stop if the book has already moved. Slippage is the gap between the stop or intended price and the actual fill of the market-order that the trigger releases.

Opening-only shorts and the uptick filter

Opening-only is a time restriction that lets a market-order participate only in the opening print and otherwise cancels it. An opening-only short-sale market-order on a listed stock is filled only if the opening print is an uptick from the prior close or if that prior close was itself an uptick. Short-sale-uptick is the eligibility filter that allows that opening short-sale market-order to fill only when the opening print, or the prior close, already reflects an uptick.

If a listed stock opens lower than the previous close, an opening-only short-sale market-order is cancelled with no execution.

Shared prints, preopen imbalance, and the dealer bid

A sell stop and a nearby buy limit submitted together can execute out of entry sequence if the first print that trips the stop is also the print that fills the limit.

Listed-exchange specialists published pre-open buy-side and sell-side order imbalances. That preopen-imbalance of buy-side or sell-side size before the listed open could be combined with other calculations to decide opening-period buys and sells.

In the dealer-quote market described, a bid posted above a downtick last sale can itself satisfy the uptick-bid condition used for short-sale eligibility.