Guaranteed stop

The term is defined here as the industry uses it. An ordinary stop loss order is an instruction to trade at the next available price once a level is reached, so a gapping market can fill it a long way from where it was set. A guaranteed stop is a contractual undertaking by the firm that offers it that the fill will be at the stated level whatever the market does in between. The firm carries the difference, and it charges for carrying it.

The charge takes one of two shapes: a premium taken when the order is placed, or a premium taken only if the stop is triggered. Firms also attach conditions, and those conditions differ enough that the label alone carries little information. Which instruments it can be placed on, the minimum distance it has to sit from the current price, whether the premium is refunded when the stop is not hit, whether it survives a trading halt or a market suspension, and whether it can be moved once placed are all set firm by firm. Two brokers using the same words can be selling materially different undertakings, so the contract terms rather than the phrase carry the meaning.

Nothing here is a statement about YAL. The entry defines a term a reader meets across the industry, and it is not a description of a product available on a YAL account.

One distinction is worth keeping clear. A guaranteed stop fixes the price at which a position is exited; it does not prevent a loss, it fixes where one is realised, and the premium is a cost incurred either way. It is also a different thing from negative balance protection, which is an account level protection stopping a balance from falling below zero rather than an order type attached to a single position.