A limit order is an order to buy or sell currency at a price you choose, or better. Buy limit orders are executed at your specified price or lower, sell limit orders are executed at your specified price or higher.
Limit orders aren't guaranteed – they'll only exchange if the price of a currency increases or decreases to your set limit price. If it doesn't, your order is left unfilled.
How do buy limit orders work?
You place a guaranteed ‘limit’ on how much you pay to buy a currency – your limit price should be the maximum price you want to pay per unit of currency. If your currency hits your limit price or lower, exchanges happen automatically.
Example: The current market rate for buying Euros is €1 = £0.87, but you're only interested in buying if the rate goes down to £0.85 or lower. You set your limit price to €1 = £0.85.
- If the FX rate drops from £0.87 to £0.85 or lower, your order will be executed (in full or partially) at £0.85 or lower
- If the FX rate doesn’t drop to £0.85, your order won’t execute
How do sell limit orders work?
With a sell limit order, a currency is sold at your limit price or higher. Your limit price should be the minimum rate at which you are willing to sell the currency.
Example. The current market rate for selling Euros is €1 = £0.87, but you're only interested in selling if the rate goes up to £0.88 or higher. You would set your limit price to £0.88.
- If the FX rate rises from £0.87 to £0.88 or higher, your order will be executed (in full or partially) at £0.88 or higher
- If the FX rate doesn’t rise, your order won’t execute
Currency exchanges are subject to change based on the market rate, so they may vary. Learn more about currency exchanges for your business.