Bracket

A "Bracket: order is used if an investor wants to sell a security at a pre-defined level of profit or to sell with a pre-defined loss. The order can be placed as a buy (to secure a short position) or sell order.

Example of use

Sell order:

By using a single order, the investor secures the purchase price of the securities so that the sale occurs at the profit level defined in advance or at the maximum predefined allowed loss.

Buy order:

Due to the nature of the order, a buy order is mainly applied in order to open a short position. In this case, closing also leads to a pre-defined level of profit or a pre-defined maximum acceptable loss.

Placing an order

The investor has purchased a stock at CZK 100. The investor's strategy is to realize a profit of 15% while limiting acceptable losses to 5% in the event that prices move downwards. In this case the investor places a sell order by pressing the "Bracket" button.

The limit price is entered in the order, which is CZK 115 in this case into "High Price (CZK)", and the stop price, which is CZK 95 in this case into "Low Stop Price (CZK)".

It is also good to fill in the "Low Price (CZK)" field, e.g. CZK 90 (once the Stoploss side of the order is activated, the order will be satisfied in the worst case scenario, if this field is left blank, the order will be sent as a "market" type order to be satisfied at any price).

If the price reaches CZK 115, a sell order will be sent to the market with this limit price. Conversely, if the price drops to CZK 95, the Stoploss sell order will be activated and will be satisfied at the best possible price, and in the worst case at the entered "Low Price (CZK)", e.g. in our case CZK 90.

NOTE:

1. In order to limit the risk due to the technical delay in the reaction of a Bracket order during sudden changes in prices on the market the order has the following limitations:

- The order can only be used for stocks listed on the Prime Market
- The minimum gap between the limit price and the stop price is 6% of the lower of the two prices.

2. Funds are always blocked for a buy Bracket order up to the maximum possible amount for the validity of the order, i.e. regardless of if the active area is currently the Limit Price or Stoploss part of the order.

WARNING:

Sudden price changes (caused, for example, by the announcement of price-influencing information, etc.) may cause the market price moves outside the range entered by the investor and the Stoploss order will be created with a delay. When using a Bracket order, the investor is aware of the fact that the broker has no responsibility for damages caused by this technical delay in the order's reaction to market conditions.