What are pending orders & point?

 The word ‘point’ can be used in different ways in the financial markets. It could be used to mean the minimal price change in an asset or currency pair. E.g. initial price of the security was 1.3550 and it has dropped to 1.3545. It means that there was a 5-point rate change. A point can also be used to refer to ‘basis point’, which is one-hundredth of a percentage point or 1/10000. It is a term popularly used to describe the changes in the interest rate in one year for a currency. Point can also be used to refer to percentage point, which is the arithmetical difference between two percentages.

The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs. In CFD trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit of the underlying market.

There are two transactions types; instant execution and pending orders.

Whereas instant execution opens a transaction at the price currently quoted on the market, pending orders allow you to set orders that will be activated once the price reaches a level chosen by you.

There are four types of pending orders that you can utilise at Trade XN and they include:

1. Buy Stop

The Buy Stop order allows you to set a buy order above the current market price. What this means is that if the current market price is $20 and the set Buy Stop price is $22, then once the market reaches the price level of $22, a buy transaction will be executed on this market.

2. Sell Stop

The Sell Stop order allows you to set a sell order below the current market price. What this means is that if the current market price is $20 and the set Sell Stop price is $18, then once the market reaches the price level of $18, a sell transaction will be executed on this market.

3. Buy Limit

The Buy Limit order allows you to set a buy order below the current market price. What this means is that if the current market price is $20 and the set Buy Limit price is $18, then once the market reaches the price level of $18, a buy transaction will be executed on this market.

4. Sell Limit

The Sell Limit order allows you to set a sell order above the current market price. What this means is that if the current market price is $20 and the set Sell Limit price is $22, then once the market reaches the price level of $22, a sell transaction will be executed on this market.