Stop Market orders on the Futures Exchange

This information comes directly from Nexo's help center

A Stop Market order on the Futures Exchange is an order type, which performs a Market order once a prespecified price has been reached. The price of execution is defined by the client, and once it is crossed or exceeded, the Stop Order acts as a Market Order and is carried out.

With Stop Market orders, you can increase the odds of achieving a trade at a desired entry or exit price. Stop Market orders are as beneficial to entries, as they are for leaving a position. They act in a way as Stop Loss or Take Profit orders for your futures positions.

It is important to note that Stop Market orders will be filled only if the Trigger Price is reached. However, the resulting Market order does not guarantee the price, nor the precision at which the order will be completed. In other words, despite the fact that we will aim to fill the order at the best available price at the time of execution, the final price could be much different than expected in fast-paced market conditions.

How to place a Sell Stop Market order 

1. First, you should navigate to the Futures Exchange.

2. From there, you have to select the ‘Stop market’ order type, as illustrated:


3. Then, you can set a Trigger Price in terms of USDT (e.g. 22,000 USDT) and Amount in terms of the contract currency (e.g. BTC). Keep in mind that the current Futures price will be used to place the order and you can decide what amount to enter with. From the ‘Open’ tab, you can set orders which are to be opened once the Trigger Price is reached. On the other hand, from the ‘Close’ tab, you can close orders at a specific Trigger Price but only if you have an open futures position.


4. Once placed, the Stop Market order will remain active in your ‘Open Orders’ until it is filled or cancelled.



Using the Open Stop Market option 

With this mechanism, you can set a pending order which is to be executed when your Trigger Price is reached. You can place both Long and Short orders simultaneously. For example:

The current price of BTC is 25,000 USDT and you place a 1 BTCUSDT Open Long order in the price of 26,000 USDT (can be triggered if the price is higher), expecting the price of Bitcoin to increase. Simultaneously, you place an Open Short order at a price of 24,000 USDT (can be triggered if the price is lower), in case the price of BTC declines.

That way, regardless of whether the market is rising or falling, you would have two well-defined orders which will be triggered only when the prespecified price is hit.

Using the Close Stop Market option 

To better explain the underlying mechanisms behind this order type, we will run an exemplary scenario:

Let us say that you have an open perpetual futures contract at 2x leverage in the amount of 1 BTCUSDT and you have chosen to go long. The price of BTC is currently 27,000 USDT. You can secure profits and minimise losses at the same time by placing both a Close Long and a Close Short order. For instance:

  • You place a Close Long order at Trigger Price = 29,000 USDT. If the price is reached or exceeded, the order will be performed and you will exit with a profit.
  • Simultaneously, you place a Close Long order at a Trigger Price of 25,500 USDT. Should this price or a lower one be reached instead, you will exit the position and prevent further loss.

By doing that, you define a threshold of how much you are willing to profit or fall back on your futures positions. Using the above example, the same can work for you if you plan to go Short instead and place two Close Short orders at different price levels.

Source: Stop Market orders on the Futures Exchange
October 24, 2022
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