The MX Trader Account

For example:
A share currently trades at 120p. You want to buy should the price fall to 110p but if it continues falling you want to limit your potential loss to 5p a share. You set a Purchase Trigger at 110p AND a Stop-Loss Trigger at 105p.

If the price falls to 110p, and you've funds available your purchase order would be dealt. And if the price then falls to 105p the shares you purchased will be sold, limiting your loss to 5p per share.

There may be occasions when you also want to lock-in gains, and this is where the Tracking Stop-Loss trigger applies.

For example:
You set a Purchase Trigger at 110p. If the price rises, but starts to drop back you would then want to sell, so you set a Tracking Stop-Loss to 'shadow' the price as it rises but sell if it drops by 10p from it's peak.

As the price rises, so your Tracking Stop-Loss follows the price up, shadowing the market price by, in this example, 10p.

Let's say the price rises to 180p then starts to fall. As it comes back down to 170p your Tracking Stop-Loss will be triggered.

In this example you'd have bought at 110p and sold at 170p, locking in a profit of 60p per share.

In a falling market you can use a Tracking Stop-Loss to limit the downside too.

For example;
You buy a share at 110p and set a Tracking Stop-Loss of 10p. The price falls immediately to 100p so your Tracking Stop-Loss is triggered and your holding sold at 100p, limiting your loss to 10p per share.

But if the price rose to 115p before falling back, your Tracking Stop-Loss would trigger at 105p, limiting your loss to just 5p per share.

This deactivates your Stop-Loss or Tracking Stop-Loss Trigger when the price spread is outside a pre-determined range.

The range starts at 15% at a share price of 0p, rising incrementally to a spread of 5% at 1000p or above. You can choose to add the SafeGuard to stocks whose mid-price is 20p or more.

Indicated market prices for stocks may fluctuate throughout the trading period, sometimes with a wide spread. In addition a limited number of stocks may experience wider than normal spreads, particularly early in the trading day.

If your Stop-loss or Tracking Stop-loss margin is set too near the market price you may find your order executed as a result of spreads rather than firm price movements.

When setting Stop-Loss or Tracking Stop-Loss Triggers in conjunction with Purchase Price Limit Triggers be sure to take likely spreads into account otherwise there is a possibility that your Purchase and Stop-Loss instructions might take place together.

The actual price at which your order is dealt may, on occasions, be better than the indicated market price for that stock; that is you may pay less, or receive more, than the indicated market price.

When the indicated market price rises to, or is higher than, your price limit your stock will be sold, but you may receive a better price for your shares. Your Stop-Loss / Tracking Stop-Loss Triggers may therefore appear to trigger too soon, but it will have been driven by the indicated market price falling below your set level.

For each Purchase Trigger you'd also set the amount you want to invest, or the number of shares to buy.

For a Sale Trigger you'd show the number of shares to sell, or the amount you want to raise from the sale.

Your instruction is then triggered when your price is reached.

For example:
A share is currently trading at 135p and you want to buy if the price falls to 125p. You set a Purchase Trigger of 125p (together with the number of shares you want to buy, or the amount you want to invest) and when the market price falls to this level or below, your order will be dealt (so long as you've sufficient funds in your MoneyExtra Frequent Trader Share Account Account).

Conversely, you hold shares in your MX Frequent Trader Account and they are currently trading at 150p. You want to sell if the price reaches 175p or above.

You set a Sale Trigger of 175p and when the price reaches that level, or higher, your shares will be sold.

Of course you might want to combine the two. For instance, you hold shares valued at 150p. If the price rises to 175p or higher you want to sell, but if it falls to 100p or lower you want to buy some more. So you set a Sale Trigger at 175p AND a Purchase Trigger at 100p.

You can also use this scenario to sell a stock as it starts to fall from what you see as a peak, and then buy-back your holding as the price reaches your floor.

When the indicated market price falls to your target price, or less, we will attempt to buy the stock. But should the actual quoted price rise above your limit we will not then execute your order.

When the indicated market price rises to, or is higher than, your price limit your stock will be sold, but you may as a result of 'best execution' receive a better price for your shares.

Choose a Price Alert when you want details e-mailed to you, or select PriceWatch when you want the share to be highlighted in your MX Frequent Trader Account.

For example:
You hold a stock currently trading at 110p. If the price rises to 150p you might want to sell, so you set a PriceAlert (PriceWatch) at 150p. When this price is reached we'll e-mail (or for a PriceWatch highlight the share in your account) so you can consider whether or not you want to take any further action. You can then choose whether or not to sell at this time.

Or you are considering buying a stock currently trading at 110p, but only if the price falls to 90p. You set a PriceAlert at 90p and when the price falls to this level you are advised. You can then choose whether or not to buy at this time.

Enter the acquisition cost, taking into account any corporate actions that may have changed your book cost and then, as the price changes with market conditions, you'll be able to see how much notional profit / loss the share has made.

Of course, the profit / loss figure is notional because it isn't an actual profit / loss until you crystallise it by selling the shares!

If there is a change in the share structure, for instance you acquire more shares under a rights issue, you will want to change your acquisition cost to reflect the latest change, perhaps choosing to show your average 'book price' across your total holding.

You can use this facility in conjunction with the Purchase Price Limit Trigger, even if you don't currently have funds available in your MX Frequent Trader Account to cover the deal. Then, when funds are available in the account, either from other sales or money you've paid in, your Triggers become active.

And you can add a Price Notification, either PriceAlert for e-mail or PriceWatch for a stock to be highlighted on the StockWatch screen, when the price exceeds your set limits.

When you add an investment to StockWatch we'll 'capture' the current price at that time. Then, every time you view your StockWatch you'll see the up to date price, original price and percentage rise / fall, enabling you to track the performance of those shares at a glance.