How to use limit orders

  • You can use our range of orders to reach your trading goals. At City Index, we offer Limit Orders alongside Stop Losses and this effectively enables you to manage both your downside and upside potential.  

    What are limit orders?

    Limit orders are used to lock in profits by closing a winning trade once a market passes a trigger value set by you. This means that you are able to automatically close trades and cash in your gains if the market moves in the way you expect, helping you to reach your profit targets.

    Example: UK 100 

    Let’s say you've bought £2 per point of the UK 100 at 5000, and have highlighted 5200 as your profit target, a £400 gain (5200-5000 x £2). You can use a limit order to ensure that, should the UK 100 reach 5200, our systems automatically close out your trade at this level. Sure enough, the UK 100 rallies to 5200, and our systems automatically close your position out at 5200: our bid price. Next time you log onto the platform, you'll see your £400 profit already credited onto your cash balance.

    Using limit orders with stop loss orders

    Our stop loss orders are incredibly flexible and while they're mainly used by spread bettors to stop losses, they can also be used to cash in gains as well. As the market goes in your favour, you can move your stop loss in line with the market to lock in your profits. Many spread bettors use this strategy along with a limit order to put a minimum profit and maximum profit cap on their trades.

    Example: Wall Street 

    Let’s say you have bought £2 per point of the Wall Street Index at 10100, expecting it to rise over the coming days. You set a guaranteed stop loss at 9950 to ensure that your downside risk is protected and put a limit order at 10300 as a profit target. Sure enough, Morgan Stanley announces a solid set of earnings, which lifts the Wall Street Index to 10200.

    Seeing this move, you can now move your guaranteed stop loss higher to 10150 to ensure that the minimum you can make from this trade would be £100 (10150-10100 x £2). Remember, you still have your limit order set at 10300, meaning that should the Wall Street continue to rise and reach this level, your trade will automatically close at your profit goal. By moving your guaranteed stop loss higher in line with the market rise, you've ensured that - at the very minimum - you'll will make a £100 profit on this trade.

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