Using orders

  • Risk management plays an important part in determining your trading success and should be a key part of your trading strategy.

    We provide an extensive range of order types to help you limit your losses without capping your profit potential.

    Risk-management orders are trading tools that can be used to open, close, or amend your CFD trading positions at specific prices dictated by you.

    An order is an instruction to execute a trade when the price of a market reaches a trigger value set by you. Orders can help you to be flexible with your trading decisions. They can also be used to support a range of different trading strategies.

    The different opening order types:

    Limit order: An order to automatically open a trade at a better price than the current price of a market that we’re offering, providing the price of the market reaches the specified order level. A limit order can be used to help you lock-in a profit.

    Stop order: An order to automatically open a trade at a worse price than the current price of a market that we’re offering, providing the price of the market reaches the specified order level.

    One cancels the other (OCO): An order allowing you to take multiple views on the same market by placing two simultaneous opening orders. When the available market prices trigger one order, that order will be executed while the remaining order will automatically be deleted.

    The different closing order types:

    Limit order: Limit closing orders are orders to automatically close a trade at a better price than the current available price of a market, locking in any profit.

    Stop loss order: An order to automatically close a trade at a worse price than the currently available price of a market, normally for a loss. It’s a key tool in helping you minimise your losses if a price moves against you.

    If done/Contingent order: These are closing orders attached to opening orders that will be activated once the opening order has been executed into a live trade.

    How to use opening orders within trades:

    Limit orders:

    • Buying long: You could use a limit buy order to create a new open position at a price that is lower than the price quoted at the time.
    • Selling short: You could use a limit sell order to create a new open position at a price that is higher than the price quoted at the time.

    Stop orders:

    • Buying long: You could use a stop buy order to create a new open position at a price that is higher than the price quoted at the time.
    • Selling short: You could use a stop sell order to create a new open position at a price that is lower than the price quoted at the time.

    How to use closing orders within trades:

    Limit orders:

    • Imagine you’re long stock ‘A’ at 321. If you want to take profits at 360, you can set a closing limit order to sell at 360.
    • Or, if you’re short stock ‘A’ at 359 and you want to take profits at 320, you can set a closing limit order to buy at 320.

    Stop orders:

    • Long Index ‘A’ at 4250 If you want to take losses at 3750, you can set a closing stop loss to sell at 3750.
    • Short Index ‘A’ at 4000 If you want to take losses at 4500, you can set a closing stop loss to buy at 4500.

    Please note that 'market gapping' may occur.

    What is market gapping and slippage?

    Market gapping occurs when prices literally ‘gap’ between one price and the next, without trading at the prices in between: usually in times of extreme market volatility.

    A standard stop loss order doesn’t fully protect your trading risk. A stop loss order is set at your specified price which, when reached, automatically triggers an order to close your position. The closing trade is executed at the next available price immediately after the order is triggered.

    This can be at the same price, a better or a worse price than the specified execution level. In cases of severe gapping, the execution price may be at a substantially worse price than your order price.

    Guaranteed stop loss orders (GSLO): These are used to ensure that the level at which an order will be executed is the exact level that you’ve specified, regardless of any gapping in the market.

    Guaranteed stop loss orders – what you need to know

    • GSLO premium – there is an additional charge for placing a GSLO upon confirmation of the order.
    • Amendments – a GSLO can be amended without additional charges and during trading hours only.
    • Minimum distance – Order levels must be placed a minimum distance above and below the current quoted price.
    • Availability – GSLOs are not available on all our markets. To find out if we offer GSLO on a particular market, please refer to the ‘Market Information’ tab within the trading platform.

    When are guaranteed stop loss orders most useful?

    • If you’re trading in volatile markets
    • If you don’t want to risk more than your initial deposit
    • If the market is prone to gapping

    Example of using guaranteed stop loss order:

    Say you are long stock ‘A’ at 150 cents with a guaranteed stop loss order placed at 130 cents. Stock ‘A’ closes at 135 cents on Tuesday.

    On Wednesday, the company announces disastrous results before the market opens. This means that when trading hours begin, stock ‘A’ prices open at 125 cents, much lower than the previous close.

    If you had placed a standard stop loss order, the trade would have been automatically closed at 125 cents. However, as the stop loss was guaranteed, the trade is automatically closed at the specified 130 cents.

    How long are orders valid for?

    You can choose how long you’d like us to maintain your order by selecting the relevant ‘good until’ setting.

    Good until settings:

    Good for the day (GFD): Effective only on the day these orders are placed. If the market trades during fixed trading hours (not 24 hours), then it will expire at the end of the day’s trading hours. If the market is 24 hours, the order will expire at midnight.

    Good till time (GTT): Applicable and effective from the day it is placed until a date and time specified by you.

    Good till cancelled (GTC): Applicable and effective from the day it’s placed until you cancel it.

    Don’t forget, if you leave unlinked orders to close a position, and if you close your position prior to the orders being triggered, then these orders will not automatically be cancelled and may end up opening a new position.

    Risk management

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