Depending on your particular strategy there are a number of different orders you can place. The most common types of orders you will come across when spread betting are stops and limits, and these can come in the form of either orders to open a new position or to close an existing bet.
Orders to open
These orders can be used to open a deal automatically for you when the market hits a certain level. Say you want to sell GBP/USD when it reaches 1.5400, as your research suggests it will drop soon after. Instead of constantly monitoring the market, you can set up an order to open your position when it reaches that level.
Orders to open are sometimes called entry orders.
Orders to close
Orders of this type will automatically close an existing deal when the market hits a certain price.
They are often used when you’re looking to lock in potential profits once a price moves in your favour (a limit), or to cap your losses if you’re concerned a market may move even further against you (a stop).
Orders to close are sometimes called closing orders.
While entry and closing orders are only executed when the market hits the price you want, a market order is an instruction to carry out a deal immediately at the best available price for your specified bet size. In other words, execution speed takes priority over price.
As long the underlying market is liquid enough, ie there are enough willing buyers and sellers, a market order will be carried out straight away.
You should use this type of order if your key aim is to deal immediately and – importantly – only if you accept that the order may be executed at a worse price than the current buy or sell price.
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