Managing risk

Leveraged trades carry the risk of large losses if the market moves against you. These potential losses can be limited by using the trading tools available through our trading platform, and we strongly recommend using these tools, especially in volatile markets.

Order types

An order is an instruction to trade that will be executed only if and when your specified price level is reached.

Orders are flexible trading tools that allow you to open, close, or amend positions. They are a valuable tool for managing risk.

City Index offers a range of orders to help you get into, and out of, positions at the price you want to.

Limit orders

A limit order is an instruction to buy or sell at a better price than the current price. When used to close a position, a limit order is designed to lock-in profit on a trade that has moved in the direction you expect. Limit orders can also be used to open a trade at a better price than the current price.

Stop orders

A stop order is the opposite of a limit order: it is designed to limit losses on an open order by closing a losing trade at a worse price than the original purchase price. A stop order can also be used to open a trade at a lower price.

Stop loss orders

A stop loss order is a trading order tied specifically to an open position. It has one purpose, which is to cut risk and reduce a potential loss. You place a stop loss order at a price worse than your opening trade, with the idea that your position is closed automatically if the market moves through that price. The position will be closed at the best price available when the order is triggered, but there is the risk that if the market gaps, the best available price could be significantly worse than the price set in the order.

Guaranteed stop loss order

Like a stop loss order, this automatically closes an open position if the market moves through your trigger price. However, the guarantee means that, even if the market gaps, you will close your trade at the exact price specified in the order. There is an additional charge for this service, and guaranteed stop loss orders are not available on all markets.

One cancels the other order

One cancels the other orders are used to protect against moves in either direction. If you have an open position with both a stop loss order and a limit sell order in place, you can limit losses and protect gains.

Because these two particular orders are linked to each other, when one order is activated, the other is cancelled. Therefore, if your limit order is activated, the stop loss order is immediately cancelled. This means that you don't have to remember to cancel the order yourself, and prevents the unused order from opening a new position.