5min read

The ‘limit order’ is the most popular order type, since it lets you specify the price at which you want to buy or sell a CFD and involves lining up in the queue with other traders. Execution of a limit order occurs when the market passes through your chosen price. The important point to remember with limit orders is that, unlike market orders, they’re always set above or below the current market price.

For example, the order to ‘buy 1000 BHP at 27.20,’ indicates that BHP is trading at a higher level than the limit order, say at 28.50, and you wish to buy at the lower level, in this case 27.20. If the market falls to a traded price of 27.20, you may be filled at this level, but it’s not guaranteed. The order ‘sell 1000 BHP at 29.60′ indicates that you wish to sell above the current market price and the execution of that order depends on the market rallying up to that level.