Order Types

Limit Order

A limit order is an order to buy or sell at a better price than the currently prevailing market price e.g. an order to buy at a lower price than the current market price (possibly because you believe that this will be a good entry point and you may not be watching the market at the appropriate time). The limit order will be executed at the next available market price immediately after the order is triggered which means that any slippage improves the execution price.

Stop Order

A Stop order is an instruction to buy or sell a market at a price which is worse than that prevailing at the time of placing the order. You can use a stop order to do the following:

• Open a new long position (Stop Buy)
• Close an existing long position to cap a loss (Stop Sell)
• Close an existing short position to cap a loss (Stop Buy)
• Open a new short position (Stop Sell)

Stop Loss Order

A stop loss is a stop order directly linked to an open position, which will automatically close the position when it has reached a predefined value. They are an important tool to ensure that losses do not get out of control.

A stop loss order is set at a price which, when reached, automatically triggers a trade 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, better or worse price than the specified level (the trigger level). In most cases, the order is executed at the same price as the stop loss level but it is possible that the execution price is at a worse level (known as slippage) and in cases of severe gapping the execution price may be at a substantially worse price.

Stop loss orders are triggered and executed on the basis of City Index CFD prices (known as "basis our quote") and are assumed to be good until cancelled (GTC) unless otherwise specified. There is no additional charge for using a stop loss.

Guaranteed Stop Loss Order

If you feel that you need greater comfort than that afforded by a simple Stop Loss then you may be able to opt for a guaranteed stop loss. Guaranteed stop losses are not available on all instruments. As the name suggests a guaranteed stop loss guarantees that you will obtain your stop loss trigger value.

There is an additional charge for this type of order known as the guaranteed stop loss premium and there are minimum distances that orders must be placed away from the current price.

Example: Selling the Wall Street CFD with a guaranteed stop loss

You decide to sell the Wall Street CFD. A City Index trader quotes you 8026 / 8032 and you sell 10 CFDs as a limited risk trade. Your position is opened at 8026 - 4 = 8022 (4 is the limited risk premium). You decide to set your stop guaranteed at 8092 (which is 70 points away from your opening level).

Opening Trade

Price of Wall Street CFD - 8022
Number of CFDs - 10
Value of CFDs - $80,220.00
Margin requirement (the maximum loss) - $700.00

If the trade had been executed without a stop loss the margin requirement would have been 7.5% of the contract value - $6,016.50.

Closing Trade

Later the same day following an unexpectedly good non-farm payrolls number, the City Index price gaps higher to stand 8152/8158. Your position is automatically closed at 8092.

Price of Wall Street CFD - 8092
Number of CFDs - 10
Value of CFDs - $80,920.00

Closing Value of CFDs - $80,920.00
Opening Value of CFDs - $80,220.00
Overall Loss on Trade - $700

This is your maximum loss regardless of what happens to City Index's quote. Your profits are not limited by this guaranteed stop. The loss without a guaranteed stop would be (8158 - 8022) x 10 = $1,360.00

Linked Order

A Linked Order is a combination of two orders placed on a trade: a stop order and a limit order. Should one be triggered, this will automatically cancel the other. Should you close the position, both orders will be cancelled.

Selling the Wall Street CFD

You decide to sell the Wall Street CFD. A City Index trader quotes you 10408/10414. You decide to sell 10 CFDs at 10408.

Opening Trade

Price of Wall Street CFD - 10408
Number of CFDs - 10
Value of CFDs - $104,080.00
Margin requirement - $7,806.00

At the time of placing the order, you place a Stop Loss at 10478 and a Linked Limit Order at 10338.

Closing Trade

Price of Wall Street CFD - 10
Number of CFDs - $103,380.00
Value of CFDs - $103,380.00

Closing Value of CFDs - $103,380.00
Opening Value of CFDs - $104,080.00
Overall Profit on Trade - $700.00

Out of Hours Limit Order

You are able to place orders to open positions when the markets are closed. 

You can use a stop order:

• Open a new long position (Stop Buy)
• Open a new short position (Stop Sell)

You can use a limit order to:

• Open a new long position (Limit Buy)
• Open a new short position (Limit Sell)

Your order will be placed during City Index trading hours and executed at the next available market price immediately after the order is triggered which means that any slippage improves the execution price.