All order types listed below are accepted by ACM USA and may be executed either online or over the phone.
Spot Order
A spot order is an order to buy or sell at the current market price.
When using ACM USA’s online trading platform to place a spot order, you specify the currency pair and your deal size, then click on the buy or sell button. The order is executed instantaneously, meaning the price seen at the time of the click is honored.
Placing a market order on the phone is similar, but frequently takes a few seconds more. You specify the currency pair and your deal size to the dealer. The dealer then gives you a two-way price (bid and ask). You take one of the two prices (although you may ask for a re-quote). The dealer then confirms the trade.
Under normal market conditions, ACM USA dealers usually respond to online market orders in five to 10 seconds. A phone order can usually be executed in an additional 10 to 15 seconds.
Whether you choose to deal with ACM USA or another firm, you should be aware that it is a correct market practice for institutions to quote two-way prices (bid and ask) to a client who wishes to trade. A firm that does not do so is unquestionably taking advantage of its clients’ lack of knowledge as far trading procedures are concerned.
Limit Order
A limit order is an order placed to buy or sell at a defined price. The order contains three variables: price, orientation (Buy/Sell) and duration. You define the price at which you wish to buy or sell a certain currency pair and specify the duration that the order should remain active. There are two duration options:
GTC (good ‘til cancelled): remains active until you cancel it. The dealer will not cancel the order at any time, so it is your responsibility to remember that you have entered it.
GFD (good for the day): remains active until the end of the trading day. Since foreign exchange is an ongoing market, the end of the trading day must be a pre-defined hour. For ACM USA, the end of the trading day is 11:00 p.m. GMT or 7:00 p.m. ET. 6 pm after daylight savings.
Limit Orders can be used to add to pre-existing positions or enter the market as well.
Stop Order
A stop order is an order to buy or sell at a certain price. As with limit orders, a stop order contains three variables: price, orientation and duration. You define the price at which you wish to buy or sell a certain currency pair and specify the duration that the order should remain active. As with limit orders, there are two duration options: GTC and GFD.
The main difference between a limit order and a stop order is that stop orders are usually used to limit loss potential on a transaction while limit orders are usually used to take profits.
To illustrate, let’s say you buy 100,000 GBP/USD at 1.9640. You’re expecting a 60 to 70 pip move in the market, but want to protect yourself in case you have overestimated the potential strength of the pound. You know that 1.9610 is a critical support level so you place a stop loss order to sell at that level. In doing so, you have limited your risk on this particular trade to 30 pips or $300.
You may also use a stop order when you are expecting a price breakout to occur and want to grasp the opportunity to ride the breakout. In this case, you place an order to buy or sell “on stop.” For example, you see GBP/USD breaking through 1.9860 resistance level. You believe that if this happens, the price of GBP/USD could be headed to 1.9940 or over. At this point, the market is at 1.9855, so you place an order to buy 500,000 GBP/USD at 1.9890 on stop. Should the breakout occur, your stop order to buy will be executed at the price of 1.9890.
Order Cancels Other (OCO)
To illustrate, let’s say the price of GBP/USD is 1.9840. You want to either (a) buy 500,000 at 1.9890 over the resistance level in anticipation of a breakout or (b) sell 500,000 if the price falls to 1.9815, a support level. The logic goes that if 1.9890 is reached, your order to buy 500,000 will be executed and your order to sell at 1.9815 will be automatically cancelled. On the other hand, should the price decline to 1.9815, your order to sell would be instantly executed while your buy order was simultaneously cancelled.
All orders executed/cancelled or pending can be viewed on the platform in the “Order Book and Trade Log” window.