A Guaranteed Stop Loss (GSL) is a risk management feature offered by some forex brokers that ensures your trade will be closed at the exact stop loss price you set, regardless of market volatility or gaps. This means your potential losses are strictly limited, providing traders with enhanced protection, especially during high-impact news events or market gaps.
This article explains how guaranteed stop loss orders work, which brokers offer them, their benefits, and the costs involved.
What Is a Guaranteed Stop Loss?
A guaranteed stop loss is an order type that guarantees closure of a position at the specified stop loss price. Unlike regular stop losses that can be subject to slippage (execution at a worse price), GSLs protect traders from unexpected price jumps.
Key Points:
- Protects against slippage and gapping
- Offers certainty of risk exposure
- Often available only on specific account types or instruments
- Usually involves an additional premium or higher spread
Benefits of Guaranteed Stop Loss Orders
- Full risk control: Know your exact maximum loss before entering a trade
- Peace of mind: Protects against flash crashes and volatile news spikes
- Suitable for all traders: Essential for retail traders, scalpers, and automated systems
- Compliance and risk management: Helps meet strict regulatory requirements on risk disclosure
Forex Brokers Offering Guaranteed Stop Loss
1. IG Markets
- Offers guaranteed stop loss on major forex pairs and indices
- Available on spread betting and CFD accounts
- Premium charged as wider spread or explicit fee
- Widely trusted for transparent execution
2. City Index
- Provides GSL on forex and CFDs
- Premium included in spread or as fixed fee
- Available in UK and Australian entities
- Ideal for risk-conscious traders
3. CMC Markets
- Guaranteed stops available on major forex pairs
- Applies to retail clients in regulated jurisdictions
- Premium reflected in slightly wider spreads
- High execution quality and reliability
4. Saxo Bank
- Offers GSL on select instruments, mainly indices and forex
- Premium fees or spread adjustments apply
- Focus on institutional and professional clients
- Advanced risk tools complement GSL
5. FXCM
- Provides guaranteed stops on select accounts and instruments
- Charges additional fees or wider spreads
- Useful for traders requiring strict risk limits
Costs and Considerations
- Premium Fees: GSLs are typically not free; expect wider spreads or fixed fees
- Availability: Not all brokers offer GSL; some limit it to major pairs or account types
- Order Modification: Changing a GSL may require additional fees
- Market Hours: GSL protection may not cover market close or after-hours gaps
Key Takeaways
- Guaranteed stop loss orders eliminate slippage risk and ensure strict loss limits
- They are especially valuable during volatile market conditions
- Brokers like IG, CMC Markets, City Index, Saxo Bank, and FXCM offer GSLs with premiums
- Traders should factor in the costs and broker terms when choosing GSL options
- GSLs enhance trader confidence and compliance in risk management
Frequently Asked Questions
What is a guaranteed stop loss in forex trading?
A GSL is an order that guarantees your position will close at the stop loss price you set, preventing slippage.
Do all brokers offer guaranteed stop loss?
No, only some brokers provide GSL orders, usually on major pairs and specific account types.
Is there an extra cost for using guaranteed stop loss?
Yes, brokers usually charge a premium either via wider spreads or fixed fees.
Can guaranteed stop loss orders protect against all market gaps?
They cover most scenarios but may not protect during market close gaps or extreme flash crashes.
How do I know if my broker offers guaranteed stop loss?
Check your broker’s website or contact support to confirm GSL availability and terms.
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