CFD Order Types

CFD Order Types for todays markets

CFD Order types are very easy to understand once you get used to them, however initially they can be a little daunting. Take your time geting to know the differentCFD Order types and you'll find that you only use a couple of standard orders regularly and within no time placing orders becomes a breeze.

CFD order types fall into 3 main categories

• Market & limit CFD orders
• Contingent & If done CFD orders &
• Guaranteed CFD orders

Here we'll take a close look at each type of CFD order and some examples to go with them.

At Market or Market Order

An At Market CFD Order is an order to buy or sell a stock or CFD at the current market price. If you wanted to buy at Market and the current BID/ASK spread was $10.00 / $10.01 then you would buy at $10.01 providing enough volume is there at that price.

At Market orders are only executed during market hours.

Limit order to buy

A limit order to buy is when you wish to purchase a stock or CFD at $9.90 when the current price is higher, say $10.00. Your goal is to purchase your CFD cheaper than what the current price is.

Limit order to sell

A limit order to sell is when you wish to sell a stock or CFD at $10.10 when the current price is lower, say $10.00. Your goal is to sell your CFD higher than what the current price is.

Using a limit order to close a position is often referred to as a take profit order.

Stop order to buy to open a long position

The current price is $9.90 and you wish to buy when the price hits your entry target of $10.01. You would use a CFD order called a Stop to buy or stop to enter long.

NOTE: Not all CFD brokers allow you to use a stop to enter long on the Australian Share CFDs.

Stop order to buy to close a short position

You are already in a trade and you are short (looking to profit as the market falls). The market is at $10.00 and you have a stop to close set at $10.20. That is a stop to buy to close your short position.

Stop order to sell to open a short position

The current price is $10.10 and you wish to short sell when the price hits your entry target of $9.99. You would use a CFD order called a Stop to sell or stop to enter short.

NOTE: Not all CFD brokers allow you to use a stop to enter short on the Australian Share CFDs.

Stop order to sell to close a long position

You are already in a trade and you are long (looking to profit as the market rises). The market is at $10.20 and you have a stop to close set at $10.00. That is a stop to sell to close your long position.

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