I'm pretty sure that the concept of guaranteed stop losses is an invention of the spread betting industry, used as a marketing tool to attract new business. It does what it says on the tin, and guarantees to close your trade at a predetermined loss - come what may. And yes, you pay a premium for the privilege, just as you would with an insurance policy which, in effect, is what this facility is. The SB firm can do this as they are a market maker, i.e. they set their own prices and take the other side of your trade.