Types of Spread Betting Orders

By mosesbet · Filed Under Spread Betting Comments Off on Types of Spread Betting Orders 

Types of Spread Betting Orders

Asides from ordinary instant execution orders where you phone up your financial company to buy/sell, there are a number of other types of orders you can make in the spread betting market.  In order to make money and be successful spread betting on the FTSE and financial markets, you’ll have to understand the difference types of orders, their advantages/disadvantages, and when it’s appropriate to use them.

Instant Execution Orders

Just as it sounds, these are the basic orders whereby you phone up your bank and place your order online asking for a big and offer price.  You are free to buy and sell at any time hence there is a great degree of flexibility.  It’s also very simple for beginners.  These orders can be good for the day (GD – 24hrs) or good until cancelled (GTC) where you manually close the accounts.

Limit orders

Limit orders are automatic instructions to the bank telling them to execute orders (buy or sell) once the stock reaches are pre-determined price.  For example, if you set a buy limit order then the company will buy for you once the stock drops to a certain price.  Likewise, a sell order will sell the stock once it reaches a certain price such as a 3 point rise.  The advantage to limit orders is that you can programmed them to be automatic and buy/sell on your behalf.  The disadvantage however is that if there is a lack of movement in the market, you won’t end up doing any business.

Stop orders

Stop loss orders are very common in spread betting.  Stop-loss orders protect your exposure by instructing the financial organization to sell on your behalf is the stock price falls to a certain level (e.g. 10% in value).  This is very beneficial because it reduces your financial risk exposure and prevents you from suffering a big loss if the value of a commodity suddenly drops to zero.  Unfortunately stop-loss orders are not guaranteed at sites such as the IG Index and City Index which means you could suffer from slippage.  For more information on stop loss orders see this page.

Trailing Stop

A trailing stop is a dynamic stop-loss order which follows the price movement of market.  This allows you to lock in profits during trends in the market.  You can customise your trailing stop by entering the Stop Distance (how many points away you want the stop-loss from your opening price) and the Stop Level (how far the price has to move before the trailing stop moves).  Read trailing stops for a more detailed article on how to use trailing stops in your trades.

OCO (One Cancels the Other)

OCO’s are two orders that are linked to each other.  You can link a stop-loss order to a buy limit order (or visa versa) in one trading system.  When one of the orders is executed it automatically triggers the other.  This is beneficial for preventing heavy losses and then taking possible profits with the limit order.

MOC (Market on Close Order)

An MOC is an order to close your position at the end of the business day or another set time.  Financial traders can finish the day and go home with a clean sheet rather than worrying about the positions of their shares overnight or their liability.

GTC (Good Till Cancelled)

The GTC (good till cancelled) type of order means your order will stay in the market indefinitely until you close the account yourself.  GTCs are good for long term investments however they can get you into an awful lot of trouble if you forget about them and the price drops.

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