Target your rate with a Limit Order
Wouldn’t life be easy if we all knew exactly where exchange rates were heading? Currency fluctuations can make as much as 10% difference in just a few days, and where the buying process is drawn out – as with property, that difference can be greater still, significantly increasing the price you’ll have to pay.
Unfortunately, it’s impossible to tell what future rates will be, but with intelligence and insight it is possible to make educated decisions, and that’s precisely what we help you do, sharing our findings with our clients through regular, concise, updates.
A Limit Order lets you target a rate and purchase your foreign currency when the exchange rate reaches a certain level.
You can also just let us know the amount you want to transfer and how much you want to receive in the new currency. We'll then calculate what the exchange rate needs to be for you to achieve this amount and you can place a Limit at this level. As soon as the rate reaches this, we'll execute the trade on your behalf.
Limit orders are very useful when you would like to exchange your money at a specific, targeted exchange rate. They are very effective over a period of time if you don't need to make the transfer immediately. It’s important to be realistic with the exchange rate you are targeting though, especially if it’s over a short time period. If you contact your FC Exchange broker, they can help you with all of this.
Additionally, you can also protect your ‘downside’ and tell us the minimum amount you'd be happy to receive in the new currency. We'll work out the exchange rate that would give you this amount and you can put a ‘Stop Loss Order’ in at this level. Should the market move down, towards your ‘Stop’, we'll make the trade for you when this rate is reached.
Sometimes it is very useful to use a Stop and a Limit Order together; where ‘One Cancels the Other’ should either level be reached. This means you can target a rate, with a Limit but protect your budget with a minimum exchange rate acceptable to you with a Stop.
Certainty and Security
The only way to truly protect against future movement in the currency markets is to fix a rate in advance through a Forward Contract. In simple terms, these allow you to hold an agreed exchange rate for a period of time. They make life more predictable, and that’s usually a good thing.
Forward Contracts allow you to fix a rate in advance, this guarantees the price you will pay for your currency. They are quite simple but it’s always worth talking to one of our experts first so they can answers any questions for you.