Broker-side stop adjustments at the open

[Fairman]

Broker-side stop adjustments at the open

A stop order placed over the weekend sits on the server. On Sunday evening, the first quotes arrive, possibly with a gap. Some brokers adjust the trigger and fill rules for orders in that first minute.

The rule might be a delay, with no stops processed for the first thirty seconds, or a wider tolerance, allowing the fill to be worse than usual. It protects the broker from a bad first print, and its effect on the client is a worse fill.

Documentation exists in some execution policies, in a section about "market opening". It's rarely read.

The sign in a log is a stop filled several seconds after the first tick that would have triggered it, at a price well beyond the stop level.

A scalper rarely holds positions over the weekend, but pending orders are another matter. A stop entry placed for Monday may trigger on the gap, at a price that's the worst of the day.

Cancelling pending orders on Friday and re-placing them after the market has settled on Sunday or Monday avoids the gap entry.

One way to find out what a broker actually does at the open is a controlled test. Place a far pending stop on a liquid pair on Friday at a level that Sunday's gap is unlikely to reach, leave it, and then watch how the broker's feed treats it on Monday. That says little about a gap fill. A better test uses a very small position with a stop inside a typical Sunday gap range, and then compares the fill with the first prints in tick history.

The result won't be conclusive from one try, but a pattern across several weekends can reveal whether stops get a delay or a wider tolerance.

Is a special rule for the first minute of the week written in the execution policy of the broker used here?