Limit Orders: How they work in currency transfers

Limit orders enable you to convert money when an exchange rate price reaches a pre-determined level.

Using a limit order in currency transfers

If you want to convert money into a foreign currency but want to wait until the exchange rates moves in your favour you can use a limit order to do the conversion automatically.

By using a limit order our dealers will place an order in the market to convert money at any price you choose.

For example: If you want to convert £100,000 into USD buy think the currency price will move in your favour.  If the current rate is 1.50 and you think it will go up to 1.58 using a limit order will mean that if the price hits 1.58 your conversion will be done without you having to keep an eye on the market all the time.  Ensuring you get your price even when you are not keeping an eye on the market.

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In this example, if you successfully used a limit order at 1.58 instead of converting funds at the current market price of 1.58 you would receive an additional $8,000 on the conversion.

Of course, using a limit order does not protect you against any downside moves.  This is where a currency forward or stop entry order may be appropriate.

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Watch our video on how limit orders can be used when converting currency here:

This interview was recorded on 13th August 2019 with Mark Phipps from Linear International Payments

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