Take Profits with Limit Orders

Once you have opened a position, you can place a 'limit to close' order to help you take profits while away from the trading screen. Of course we always recommend monitoring your account in case the market moves against you.

Suppose you want to speculate on the short-term direction of the US Light Crude Oil Future price which can have rather wide fluctuations. At 11am on the day, our quote for Oct Light Crude Oil Futures is 94.64 / 94.70. You think the price will rise, and buy £2/point at 94.70. You believe the price has the potential to reach 98.00 in the short-term, and place your 'limit to close' order at 98.00. While you were out to lunch, oil price spikes to 100.50 before falling back to 96.50. Your limit order has been triggered and your position closed with a profit of £2 x (98.00 - 94.70) = £660.

Trade while on the go

It is early in the morning and our quote for GBP/USD is 1.56768 / 1.56791. You want to buy the currency pair but wish to do so at an even better price. You can leave an 'order to open' on our platform, to buy £1/point GBP/USD at 1.56000. While you are busy at work during the day, the currency pair drops to 1.55425 before recovering to 1.57100. In the meantime, your order has been triggered and filled at 1.56000, and you are sitting on a profit of £1 x (1.57100 - 1.56000) = £110.

Risk Management with Automated Stops^†††

To help limit the liability of an open position from downside risk, our trading platform has a built-in auto stop function. The algorithm analyses current market volatility and places a stop loss at an intelligent level. It is important to understand stops so let's go through an example below:

Suppose the UK 100 index opens lower on the morning, and our quote is 5427 / 5428. You think the index will sink lower and sell £2/point at 5427 to open your position. Our trading platform places an auto stop at 5527 to limit your liability from adverse price movement.

While you are busy at work during the day, the index rallies to 5550 / 5551. Your auto stop has been triggered at 5527 and your position closed with a loss of £2 x (5527 - 5427) = £200. Note that, without the auto stop, you would have lost more than you did. Had you not closed the position until the price rallied to 5550 / 5551, your loss would have been £2 x (5551 - 5427) = £248.

^††† Note that not all stop orders are guaranteed and in the event of an adverse market gap you could get a fill worse than your stop level. This is commonly known as 'slippage'.