Guaranteed Stop Loss Order (GSLO)
A guaranteed stop loss order is a stop order that assures execution at the specified price, even if the market gaps through it. Brokers that offer GSLOs take on the gap risk and often charge a premium or wider spread.
How it works
- The trader sets a stop level.
- If price hits or gaps beyond the level, the order is filled at the guaranteed price.
- The broker absorbs the difference between the guaranteed price and the actual market price.
Costs and limits
GSLOs usually carry extra fees or reduced leverage. Some brokers limit which instruments or sizes are eligible.
Example
A trader is long a stock at 100 and places a GSLO at 95. Overnight news causes the stock to open at 90. The GSLO fills at 95, protecting the trader from the gap.
Use cases
GSLOs are useful around scheduled events, such as earnings or economic releases, when gap risk is high.
Practical checklist
- Define the time horizon for Guaranteed Stop Loss Order (GSLO) and the market context.
- Identify the data inputs you trust, such as price, volume, or schedule dates.
- Write a clear entry and exit rule before committing capital.
- Size the position so a single error does not damage the account.
- Document the result to improve repeatability.
Common pitfalls
- Treating Guaranteed Stop Loss Order (GSLO) as a standalone signal instead of context.
- Ignoring liquidity, spreads, and execution friction.
- Using a rule on a different timeframe than it was designed for.
- Overfitting a small sample of past examples.
- Assuming the same behavior in abnormal volatility.
Data and measurement
Good analysis starts with consistent data. For Guaranteed Stop Loss Order (GSLO), confirm the data source, the time zone, and the sampling frequency. If the concept depends on settlement or schedule dates, align the calendar with the exchange rules. If it depends on price action, consider using adjusted data to handle corporate actions.
Risk management notes
Risk control is essential when applying Guaranteed Stop Loss Order (GSLO). Define the maximum loss per trade, the total exposure across related positions, and the conditions that invalidate the idea. A plan for fast exits is useful when markets move sharply.
Variations and related terms
Many traders use Guaranteed Stop Loss Order (GSLO) alongside broader concepts such as trend analysis, volatility regimes, and liquidity conditions. Similar tools may exist with different names or slightly different definitions, so clear documentation prevents confusion.
Practical checklist
- Define the time horizon for Guaranteed Stop Loss Order (GSLO) and the market context.
- Identify the data inputs you trust, such as price, volume, or schedule dates.
- Write a clear entry and exit rule before committing capital.
- Size the position so a single error does not damage the account.
- Document the result to improve repeatability.
Common pitfalls
- Treating Guaranteed Stop Loss Order (GSLO) as a standalone signal instead of context.
- Ignoring liquidity, spreads, and execution friction.
- Using a rule on a different timeframe than it was designed for.
- Overfitting a small sample of past examples.
- Assuming the same behavior in abnormal volatility.
Data and measurement
Good analysis starts with consistent data. For Guaranteed Stop Loss Order (GSLO), confirm the data source, the time zone, and the sampling frequency. If the concept depends on settlement or schedule dates, align the calendar with the exchange rules. If it depends on price action, consider using adjusted data to handle corporate actions.
Risk management notes
Risk control is essential when applying Guaranteed Stop Loss Order (GSLO). Define the maximum loss per trade, the total exposure across related positions, and the conditions that invalidate the idea. A plan for fast exits is useful when markets move sharply.
Variations and related terms
Many traders use Guaranteed Stop Loss Order (GSLO) alongside broader concepts such as trend analysis, volatility regimes, and liquidity conditions. Similar tools may exist with different names or slightly different definitions, so clear documentation prevents confusion.
Practical checklist
- Define the time horizon for Guaranteed Stop Loss Order (GSLO) and the market context.
- Identify the data inputs you trust, such as price, volume, or schedule dates.
- Write a clear entry and exit rule before committing capital.
- Size the position so a single error does not damage the account.
- Document the result to improve repeatability.
Common pitfalls
- Treating Guaranteed Stop Loss Order (GSLO) as a standalone signal instead of context.
- Ignoring liquidity, spreads, and execution friction.
- Using a rule on a different timeframe than it was designed for.
- Overfitting a small sample of past examples.
- Assuming the same behavior in abnormal volatility.
Data and measurement
Good analysis starts with consistent data. For Guaranteed Stop Loss Order (GSLO), confirm the data source, the time zone, and the sampling frequency. If the concept depends on settlement or schedule dates, align the calendar with the exchange rules. If it depends on price action, consider using adjusted data to handle corporate actions.