How a stop is filled when Monday opens beyond it

[Fairman]

How a stop is filled when Monday opens beyond it

Worked example, because the mechanics surprise people.

You're short EURUSD from 1.0820 with a stop at 1.0850 and hold over the weekend. Friday closes at 1.0830. Something happens on Saturday and Monday opens at 1.0890.

Your stop at 1.0850 is a stop order, which becomes a market order once price reaches it. There was never a price between 1.0830 and 1.0890, so the first available price is 1.0890, or worse if the spread is wide at the open. You get filled around there.

The planned loss was 30 pips. The actual loss is about 70 pips plus spread. On one lot that's around $700 instead of $300.

A limit order works the other way. If you had a buy limit at 1.0850 and price opened at 1.0890, the limit wouldn't fill, because you asked for a price at or below 1.0850 and the market skipped past it. But a buy limit below the opening price would fill at the opening price or better. If you had a take profit for a long set at 1.0850, it would fill at 1.0890, which is better than your target.

So stops fill worse on gaps and take profits fill at the gap price, often better. Some brokers offer guaranteed stops for a fee, which fill exactly at the level regardless.

For scalpers the simple answer is to be flat before the Friday close. If you aren't, size for the possible gap, not the stop.

One more mechanical point. Stop orders on most retail platforms sit on the broker's server, not your computer, so they trigger even if your platform is closed. That's good for normal trading. Over a weekend it just means the stop will definitely be executed at the first available price on Sunday night, with nothing you can do about it until you log in.

[FXS HongKong Scalper]

A clear example. One more thing to note is that guaranteed stops, offered by some brokers for a fee, fill exactly at the stop price even through gaps. They are not common on raw accounts, but for traders who hold through weekends they can be worth the cost. For most scalpers the simplest rule is to be flat before Friday's close. If a position has to be held, sizing it so that a gap of two or three times the normal stop distance is still acceptable limits the damage.

[Fairman]

The same thing happens on weekdays, just on a smaller scale. A news release can make price jump several pips with nothing in between, and a stop inside that jump gets filled at the next available price. That's slippage, and it's the normal behaviour of a stop order. A broker filling your stop exactly at the requested price after a gap would actually be the unusual case, unless you paid for a guaranteed stop. It's slippage in the true sense: the price you asked for didn't exist. Brokers generally can't fill at a price the market never traded. On a busy news minute the gap might be 3 to 10 pips on a major pair.

[Fairman]

Pending entry orders behave the same way and can cause bigger problems. A buy stop at 1.0860 for a breakout, with Monday opening at 1.0890, fills at 1.0890. Your stop and target were set based on 1.0860, so the trade now starts with 30 pips less room to the target and 30 pips more to the stop. If you leave pending orders over the weekend, you're accepting that possibility. I'd cancel them on Friday and place them again on Monday once spreads settle. The worst case is when the opening price is beyond both the entry and the stop, so the order fills and is stopped almost at once.

[Fairman]

Brokers also differ on what the first price actually is. In the first minutes after the Sunday open, spreads are often wide and liquidity thin. Your stop could be filled at a price that looks far from where the chart settles ten minutes later. That's another reason the Sunday open is a bad time to have orders in the market. It's also why backtests that ignore the open spread look better than live results. Ten minutes after the open, spreads on majors are usually back near normal, so a short wait costs very little.

[Fairman]

If you use a prop account, check how the firm treats weekend gaps. Some count gap losses toward the daily drawdown for Monday, which means a single gap can breach the account before you're even awake. Others require all positions closed on Friday. Either way, knowing the rule turns a possible surprise into a simple choice about whether to hold anything at all. A few firms also close weekend positions for you at a set time on Friday, so check the time if you like to manage the close yourself.

[Shadow Trader]

Friday close, a position still open with a stop sitting neatly 15 pips away. Over the weekend something happens, a political headline or a surprise decision. Sunday evening the market opens, and the first quote is already well past the stop.

The stop is not skipped, it triggers. But a stop order is a request to close at the next available price, and when that price is far off, that is where the fill lands. On most platforms a stop becomes a market order once touched, so the fill can be well beyond the level that was set.

Some brokers offer guaranteed stops, usually with a fee or wider terms. Others do not. Spreads also tend to be huge in the first minutes after the open, which adds to the damage.

Worth noting that weekend gaps in major pairs are usually small, but they do happen, and they tend to arrive when least expected.

Does your broker fill gapped stops at the next price, and has anyone ever actually got a fill back at the original level?