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Foreign Exchange Market Orders |
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Market Orders
These permit the client to immediately execute a transaction at the best available price. No price is specified on the order, since it is to be executed at the price prevailing when the order is actually done. As the client is attempting to establish or get out of a position as fast as possible, timing is critical, so making sure to spell out the flow of funds will avoid problems later on. If the client agrees to how the trader expresses the deal, there should be no disagreements. The quote is the price prevailing on the market.
At Best Orders
This particular type of order is usually for large transactions or for those clients who want to establish or get out a position as quickly as possible and do not want to disrupt the market. It allows for the client to execute a transaction at the best available price. No price is specified on the order, which lets the bank execute the order without seriously impacting the prevailing market conditions.
Stop Orders
These orders are used to limit losses, or to protect profits on previously established positions, or to kick off new positions when market moves take place. Since the foreign exchange market can be unpredictable and currency values can change swiftly in a short period of time, stop orders are used by clients wanting to protect themselves against abrupt price movements. The important thing about stop orders is that they are contingent orders and are only carried out when the stop price has traded or is touched on. A market order is triggered if and when the price reaches the selected price. A buy stop order is placed above the market price, and if the market rises to the ‘stop’ level specified in the order, the order becomes a market buy order. A sell stop order is positioned below the market order when the market drops to that level. Should that occur, it would be executed as a market sell order.
Discretionary Price Order
This, to all intents and purposes is a stop order, but the client establishes at the outset the price at which he or she wants to deal and gives the trader the discretion to do better if possible than the stated price. If, in the attempt to do so, the trader misses the level because of sudden market moves, there can be no blame on the client’s part. These orders are the most difficult to execute, since it puts liability on the trader to do the best that can be done during what can be difficult conditions for all parties involved.
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| Symbol |
Rate |
| GBP:CHF |
1.747703 |
| GBP:JPY |
155.484239 |
| GBP:USD |
1.638403 |
| NZD:USD |
0.627050 |
| EUR:CAD |
1.545998 |
| EUR:CHF |
1.516857 |
| EUR:GBP |
0.867915 |
| EUR:JPY |
134.947096 |
| EUR:USD |
1.421994 |
| AUD:JPY |
76.394373 |
| AUD:USD |
0.805000 |
| USD:CAD |
1.087204 |
| USD:CHF |
1.066711 |
| USD:JPY |
94.899879 |
| USD:SEK |
7.613010 |
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Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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© ForexCenter.com, 2005, All Rights Reserved
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