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Limit Buy Order

• A limit buy order is where you want to buy the market at a lower price than is being quoted at that time
• For example, the FTSE 100 is quoted at 4200-4204, you want to buy but believe that the market is likely to fall over the next hour or so
• You can therefore give your spread bet broker a limit buy order to buy £5 of FTSE 100 at 4190 limit
• In this case should the market move down to your price you will buy at 4190

But remember because you are always going to be buying the offer price, the market will have to go offered at 4190 in order for your order to be filled.

Example

Client: Please quote me the March FTSE 100 Broker: 4200-4204 Client: Please work a limit order to buy £5 at 4190

Limit Sell Order

• A limit sell order is where you want to sell the market at a higher price to where it's trading at that time
• If the FTSE 100 is trading at 4200-4204 a limit sell order would be any sell order that is above the current offer, perhaps selling £50 of FTSE 100 at 4220
• But again, in order to be filled the market will have to go bid at 4220 because all sell orders can only be filled on the bid price
• Limit Sell orders can be used to both go short the market at well as cover or sell out of a long position

Good Till Cancelled Orders (GTCs)

• All spread bet orders are normally placed as Good Till Cancelled, GTC for short
• If first thing in the morning you placed a limit sell order to sell £5 of the FTSE 100 at 4300, but the high for the day was 4275, then the order would not be filled
• But the order would be automatically placed in the next day's order book, unless you either cancel it or tell the broker that you only want the order working 'good for the day'
• GTC orders can also be limit orders or stop loss orders, they cannot obviously be market orders because those types of orders by definition are always filled straight away