Contingent Orders can be used as protective stop loss or take profit orders. Once the Contingency Trigger prices attached to the orders are met, the Contingent Orders will be triggered and sent to queue.

Example 1:

Customer X has 10,000 Singtel shares bought at $3.60. He places a Contingent Limit Sell order (Trigger Price) at $3.70, and the Contingent Order price at $3.70.

Scenario A: When Singtel’s last done price reaches $3.70
Outcome A: Customer X’s order will be put to queue to sell at $3.70.

Scenario B: Singtel’s price hovers at the day high of $3.65
Outcome B: Customer X’s Contingent Limit Sell Order is not triggered and remains Good Till Cancel (GTC).

Example 2:

Customer Y has 10,000 Singtel shares bought at $3.60. He places a Contingent Limit Sell order (Trigger Price) at $3.50, and the Contingent Order price at $3.70.

Scenario C: Singtel’s price hovers at the day high of $3.65
Outcome C: The Contingent Limit Order is triggered as its criteria of $3.50 is already met. The order will then be queued at $3.70, if the order is not filled by end of the trading day, it will be purged from the system.

Example 3:

Customer Z has 10,000 Singtel shares bought at $3.60. He places a Contingent Limit Sell order (Trigger Price) at $3.70, and the Contingent Order price at $3.70. Singtel’s price hovers at the day high of $3.65. Customer Z decides to close his position at $3.65 manually, without cancelling the Contingent Limit Sell order.

Scenario D: Singtel’s price rose to $3.71 the following day
Outcome D: Customer Z has a new short position for 10,000 Singtel shares. This is because Contingent Orders are Good Till Cancel if user does not delete them and/or their trigger condition is not met. In this case, Customer Z has 0 Singtel shares after closing his position. However, since the Contingent Order to sell is not cancelled, the sell order is triggered and filled, leaving him with a new short position.