Brokers With Guaranteed Stop Loss

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James Barra
James is an investment writer with a background in financial services. He has worked as a management consultant, where he delivered large-scale operational transformational programmes at some of Europe's biggest banks. James authors, edits and fact-checks content for a series of investing websites.
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Jemma Grist
Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.
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William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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Brokers with guaranteed stop loss features should be on the list of potential platforms for investors looking for limited risk trading. This built-in risk management function is a great way to negate the possibility of excessive losses when speculating on complex instruments.

This guide to brokers with guaranteed stop loss functionality explains how it works, its benefits and how it holds up against other risk management techniques. We have also listed the best brokers with guaranteed stop loss orders in 2024.

Best Brokers With Guaranteed Stop Loss

#1 - CityIndex

Why We Chose CityIndex

City Index is an established and award-winning forex, CFD and spread betting broker with top-tier global regulation, including in the UK (FCA) and Australia (ASIC). With 30+ years in the industry, 13,500+ instruments and 24/5 customer support, City Index is a solid pick for aspiring traders.

"City Index is best for new and intermediate traders looking for a wide selection of assets on user-friendly platforms."

- DayTrading Review Team
  • Instruments: CFDs, Forex, Stocks, Cryptos, Options, Commodities, Bonds
  • Regulator: ASIC, FCA, MAS
  • Platforms: MT4, TradingView, TradingCentral
  • Minimum Deposit: $0
  • Minimum Trade: 0.01 Lots
  • Leverage: 1:30 (Retail), 1:50 (Accredited Investor), 1:200 (Sophisticated Investor), 1:300 (Wholesale Investor), 1:400 (Professional Trader). Varies with jurisdiction.

#2 - IG

Why We Chose IG

Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

- DayTrading Review Team
  • Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
  • Regulator: FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA
  • Platforms: Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
  • Minimum Deposit: $0
  • Minimum Trade: 0.01 Lots
  • Leverage: 1:30 (Retail), 1:250 (Pro)

#3 - CMC Markets

Why We Chose CMC Markets

Established in 1989, CMC Markets is a respected broker listed on the London Stock Exchange and authorized by several tier-one regulators, including the FCA, ASIC and CIRO. More than 1 million traders from around the world have signed up with the multi-award winning brokerage.

"With advanced charting tools and an extensive range of tradable CFDs, including an almost unrivalled selection of currencies and custom indices, CMC Markets provides a fantastic online platform for traders of all levels. "

- DayTrading Review Team
  • Instruments: CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting
  • Regulator: FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA
  • Platforms: Web, MT4
  • Minimum Deposit: $0
  • Minimum Trade: 0.01 Lots
  • Leverage: 1:30 (Retail), 1:500 (Pro)

#4 - XTB

Why We Chose XTB

Founded in 2002 in Poland, XTB now serves more than 935,000 clients. The forex and CFD broker combines a heavily regulated trading environment with an extensive selection of 5,600+ assets and a commitment to trader satisfaction, featuring an intuitive in-house platform with superb tools to support aspiring day traders.

"XTB stands out as a top choice for new day traders with the terrific xStation platform, commission-free pricing, no minimum deposit, and excellent educational tools, many of which are seamlessly integrated into the platform. "

- DayTrading Review Team
  • Instruments: CFDs, Forex, Stocks, Indices, Commodities, Crypto, ETFs
  • Regulator: FCA, CySEC, KNF, CNMV, DFSA, FSC
  • Platforms: xStation
  • Minimum Deposit: $0
  • Minimum Trade: 0.01 Lots
  • Leverage: 1:30 (EU) 1:500 (Global)

#5 - Plus500

Why We Chose Plus500

Established in 2008 and headquartered in Israel, Plus500 is a prominent brokerage that boasts over 25 million registered traders in over 50 countries. Specializing in CFD trading, the company offers an intuitive, proprietary platform and mobile app. It maintains competitive spreads and does not charge commissions or deposit or withdrawal fees. Plus500 also continues to shine as one of the most trusted brokers with licenses from reputable regulators, including the FCA, ASIC and CySEC.

"Plus500 offers a super-clean experience for traders with a CFD trading platform that sports a modern design and dynamic charting. That said, the broker’s research tools are limited, fees trail the cheapest brokers, and there’s room for enhancement in its educational resources."

- DayTrading Review Team
  • Instruments: CFDs on Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto
  • Regulator: FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA
  • Platforms: WebTrader, App
  • Minimum Deposit: $100
  • Minimum Trade: 0.01 Lots
  • Leverage: 1:30

What Is A Guaranteed Stop Loss?

A guaranteed stop loss (GSL) is a risk management tool designed to protect clients against large losses. Complex speculation like CFD trading can be highly risky, so traders need effective management systems to minimize their costs and keep their net profits high. Two common issues with retail CFD and derivatives trading are gapping and slippage, each of which can quickly cause losses much larger than expected.

Gapping refers to when the price of an asset suddenly moves from one price to another in a highly volatile market. This typically occurs in the wake of major world events and economic news. Slippage, on the other hand, is the difference between the expected execution price and the actual execution price. When the market is volatile, both positive and negative slippage can occur.

A regular stop loss order would limit your losses to a certain level if the markets move against you. However, in the event of significant gapping, your broker may not be able to close your position at the desired price. This would result in a greater loss than calculated when the order was placed. But brokers with guaranteed stop loss orders (GSLOs) will absorb this price difference, returning the expected loss to their clients.

Best brokers with guaranteed stop loss
Setting Up A Guaranteed Stop Loss Order On IG

Example

Below is an example to demonstrate how brokers with guaranteed stop loss orders work:

Suppose an investor buys 1,000 shares of BP for £10, a position size of £10,000. They then place a guaranteed stop loss 5% below the entry stock price.

Suddenly, the market gaps and experiences a quick bearish jump, the new stock price becoming £8.25. When this happens, investors without a stop loss may rush to sell, likely seeing a further price drop, thus a more significant loss. Those with regular stop loss orders would see their positions closed at £8.25. However, using brokers with guaranteed stop loss orders would have resulted in a closing point of £9.50.

Doing some maths, the investor has saved the difference between its guaranteed exit value and the market price the asset dropped to. This comes out to £9.50 – £8.25 = £1.25 per share or £1,250 in total.

Guaranteed Stop Loss Vs Other Risk Management Systems

Guaranteed stop loss orders are useful but they are not the only risk management tool available. Our trading experts have found that using a combination of different approaches is often best.

Take Profit Orders

A take profit order is a limit order whereby the trader specifies the profit at which they want to close a position. If the price reaches the limit, the broker will automatically close the trade. This protects investors against a sharp, unexpected downturn before they have time to close their profitable trade. This can improve net profitability and helps traders remain objective, preventing emotions like fear or greed from driving decisions.

Hedging

Hedging is another means of managing risk. It works by offsetting investment losses through positions that oppose the primary one. This acts as a kind of insurance, so you do not see such a negative impact if the market does not go your way.

While hedging does not protect against all losses, the impact of major downturns is reduced. A hedge position creates an effective risk management tool but also reduces potential profits.

There is also an added cost, known as the premium, to protect your assets in this way.

Trailing Stop Orders

For risk-effective management, find a broker that gives both trailing and guaranteed stops and pair them. Trailing stops describe an order type whereby the stop loss price is not fixed to one amount but as a percentage below the market price. This means that, if the asset value increases, the trailing stop also rises. Once the value starts dropping, the trailing stop remains fixed and the investor is always protected by the same difference. This ensures traders can lock in profits when prices rise without closing the position.

How To Use A Guaranteed Stop Loss

See the following top tips for using brokers with guaranteed stop loss orders when investing and trading:

Benefits Of Brokers With Guaranteed Stop Loss

Prevents Major Losses

The major benefit of using guaranteed stop loss orders is that they prevent you from losing excessive amounts of money in your trades. In highly volatile markets, brokers with guaranteed stop loss orders protect investors from gapping events, ensuring that the expected risk is the maximum taken on.

When you set a guaranteed stop loss, you agree to what you are comfortable losing; there is no way to lose more than this.

Hands-Off Trading

Guaranteed stop loss trading is perfect for those who cannot monitor their positions all the time. When a stop loss is set, there is no need to watch market fluctuations closely because your trade will exit automatically.

If you do not want trading to be a full-time job, then setting a guaranteed stop loss could be a sensible option.

Objectivity

Implementing a guaranteed stop loss allows you to be more objective with your trades. When monitoring stocks yourself, you may be motivated by emotions and the hope that the market will change. This kind of mentality can lead to further, more significant losses. With investments that are exited automatically, no emotional drivers enter into the equation.

Drawbacks Of Brokers With Guaranteed Stop Loss

Minimum Stop Distance

Brokers set a minimum stop distance with guaranteed stop losses. This is the minimum distance the stop loss can be from the current market price. This minimum changes according to expected volatility and gets wider the more volatile the market gets. If this minimum is too large, it can result in a guaranteed stop loss order that is not particularly protective.

Premiums

Brokers often charge a premium for investors to use a guaranteed stop loss, which is triggered when the stop loss is met. It tends to be small but varies between brokers, so choose one with a lower premium. You can also close a position before the stop loss is triggered to avoid paying the premium at all.

Short Term Fluctuations

Setting your guaranteed stop loss close to the current price minimizes losses and is a safe way to trade. However, it also means that short-term fluctuations in stock prices, for example, can trigger it and exit your trade unnecessarily. The key is to set your stop at an amount that allows some fluctuation while still minimizing your risk.

How To Compare Brokers With Guaranteed Stop Loss

Choosing brokers with guaranteed stop loss orders is a useful way to limit risk, though it is not the only comparison factor. We have produced a summary guide below on some of the other features that may influence your decision. Alternatively, check out our list of the best brokers with guaranteed stop loss functionality.

Final Word On Brokers With Guaranteed Stop Loss

Brokers with guaranteed stop loss orders offer their clients an opportunity to set in stone the risk taken on by any position. These order types can also reduce substantial losses caused by large fluctuations in the market or emotion-based trading decisions. We have found that the optimal way to use brokers with guaranteed stop loss orders is to set them at a limit that minimizes loss but does not risk early exit due to small, short-term volatility. Our experts also recommend using a range of risk management approaches in combination to best maximize net profits.

See our list of the top brokers with guaranteed stop loss functionality to get started.

FAQs

What Are Brokers With Guaranteed Stop Loss?

Guaranteed stop losses protect your open positions by making sure that they are exited if the market falls below a preset point. This means that, regardless of any significant volatility and gapping, you would not face an unexpected loss.

What Is A Guaranteed Stop Premium?

If your guaranteed stop is triggered by the market falling past the point that you set your stop at, then the broker will charge you a fee known as a premium for using the service.

Are Brokers With Guaranteed Stop Loss Orders Good?

Guaranteed stop losses are useful in volatile market conditions as prices can rise and fall very quickly, sometimes faster than platforms can follow. When a guaranteed stop loss is in place, you will never lose more than anticipated when the position was opened.

Should Beginners Use Brokers With Guaranteed Stop Loss Orders?

When used correctly, guaranteed stop losses are a great way for beginners to make trades without taking excessive risks. At any level of investing, they are effective in minimizing losses.

Do I Have To Pay Brokers With Guaranteed Stop Loss?

You will only pay for the guaranteed stop loss if it is triggered by the market falling to or below that point. If you exit the trade before that happens or the market does not fall, you will not pay to use the guaranteed stop loss.