A guaranteed stop-loss order (GSLO) does exactly what it says — it guarantees that your trade will be closed at the exact price you specify, regardless of market conditions. This is different from a standard stop loss, which can suffer slippage in fast or gapping markets.
Standard Stop Loss vs Guaranteed Stop Loss
| Feature | Standard Stop | Guaranteed Stop |
|---|---|---|
| Execution price | Next available price | Exactly your specified price |
| Slippage risk | Yes (especially in gaps) | None |
| Cost | Free | Small premium (wider spread or fee) |
| Availability | All brokers | Selected brokers |
| Weekend gaps | Can fill far from stop | Fills at exact level |
How the Premium Works
The cost of a GSLO varies by broker and market. Common approaches:
- Wider spread: The broker widens the spread when you use a GSLO. For example, FTSE spread might go from 1 point to 2 points.
- Fixed premium: A set charge added to the spread when the GSLO is placed.
- Refundable: Some brokers refund the GSLO premium if the stop is not triggered. IG does this — you only pay if the GSLO is actually hit.
Which Brokers Offer GSLOs?
| Broker | GSLO Available | Refundable? |
|---|---|---|
| IG | Yes | Yes (if not triggered) |
| CMC Markets | Yes | No |
| City Index | Yes | Yes (if not triggered) |
| Capital.com | Yes | No |
| Trade Nation | No (fixed spreads instead) | N/A |
When to Use a Guaranteed Stop Loss
GSLOs are worth the premium in specific situations:
- Holding over weekends — markets can gap significantly on Monday morning based on weekend news
- Around major events — elections, central bank decisions, earnings reports can cause sharp gaps
- Volatile markets — during periods of high VIX or geopolitical uncertainty
- Large positions — when the potential slippage on a standard stop would be significant
- Low-liquidity markets — smaller shares or exotic forex pairs where gaps are more common
When NOT to Use a GSLO
- Day trading — if you close by end of day, there is no overnight gap risk
- Tight stops on liquid markets — the premium erodes your edge on small trades
- Very short-term scalping — the wider spread makes quick entries and exits less profitable
The Bottom Line
Guaranteed stop losses are an insurance policy. Like all insurance, you hope you never need it, but it is invaluable when you do. For positions held overnight or around major events, the premium is a small price to pay for certainty.
Between 51-82% of retail investor accounts lose money when spread betting. GSLOs can limit your risk but do not guarantee profits.
