New Feature Announcement: Stop-Limit Orders

VirgoCX aims to provide easy and affordable access for all Canadians to buy and sell cryptocurrency. As a result, we are happy to announce the new feature of Stop-Limit Orders. 

Stop-limit orders are used by traders to mitigate risk and are common in marketplaces for traditional asset classes. Stop-limit orders enable traders to have more control over order execution and trading strategies. 

**Since the limit order will only be executed if it hits the specified price (or better), please note that your fund will be on hold in your VirgoCX account when you set up a limit order, and you will not be able to use this fund. **  

How do stop-limit orders work? 

A stop-limit order includes a stop price, a direction (buy/sell) as well as a limit price. The limit order is triggered when the stop price is achieved.  

For Buy Stop-Limit Order 

For example, if one places a Buy stop-limit order, when the latest Buy Price CROSSES the Stop Price, a limit order will be placed at the Limit Price associated with the order. For buy orders, set your stop price slightly lower than the limit price. This will also reduce the risk of your order not being fulfilled. 

For Sell Stop-Limit Order 

Similarly, if one places a Sell stop-limit order, when the latest Sell Price CROSSES the Stop Price, a limit order will be placed at the Limit Price associated with the order. Set your stop price slightly higher than your limit price for sell orders, and the price difference will provide a price safety buffer between the time the order is triggered and when it is completed. Please keep in mind that, similar to limit orders, stop-limit orders need sufficient balance.  

Please note that the stop price and limit price can be the same. However, if you set your stop loss limit too high or take profit limit too low, it will be difficult for your order to get filled because the market has not reached the limit price you set. 

Example 1: Protecting a BTC Position 

Let's imagine Amy purchased 0.1 BTC on VirgoCX while the BTC/CAD market is trading at $50,000. Amy wants to safeguard her deal from a possible loss if the BTC/CAD market price falls. She might enter an order like this: 

• Order Type: Stop-Limit 
• Quantity: 0.1 BTC 
• Side: Sell 
• Stop Price: $49,000.00 
• Limit Price: $48,500.00 

You can also click on the below percentage to determine how many BTC you would like to sell depending on your current holding BTC; the quantity amount will be computed automatically. 

Once this stop-limit order has been placed, she may examine her stop-limit order on the VirgoCX website or in the VirgoCX App under "Account -> My Orders tab -> Stop Limit Orders interface." If the Sell Price drops from $50,000 to $49,000, a sell limit order of 0.1 BTC at $48,500 = on the BTC/CAD market will be made. 

Because Amy's order is placed when the market reaches $49,000, it may be completed at or over her Limit Price of $48,500, depending on the state of the BTC/CAD market at the moment. The Limit Price of the order protects Amy from selling her position at a price less than she intended (i.e., $48,500). 

The benefit of placing a stop-limit order in this example is that the sell limit order is automatically placed when the Stop Price is triggered. Order placement that is conditional on Sell Price means you don’t have to be in front of a screen at the time the order is placed. 

Example 2: Entering a BTC Position 

This is an example of using a stop-limit order as part of a trading strategy involving resistance levels. 

Assume the BTC/CAD market is now trading at $50,000. Amy wants to purchase BTC, but only if the market is on an upswing and the price has surpassed a resistance level of $50,500. Amy may enter an order like this: 

• Order Type: Stop-Limit 
• Quantity: 0.1 BTC 
• Side: Buy 
• Stop Price: $50,500.00 
• Limit Price: $51,000.00 

You can also click on the below percentage to determine how many BTC you would like to buy depending on your current holding CAD balance; the quantity amount will be computed automatically. 

Amy is not exposed to downside risk associated with holding the BTC position before this resistance level has been exceeded.