Target an Exchange Rate
Market orders in the form of limit orders and stop-loss orders allow you to target a maximum and minimum exchange rate. If either of these two is reached in a set period of time, your money is automatically exchanged. This allows you to benefit from a higher exchange rate if it rises but prevents you from losing significantly more money if the market were to take a downturn.
Market Order Options
Speak to a specialist at NewbridgeFX to discuss the Market Order options available to you.
A limit order allows you to set a specific exchange rate to target above the current market levels. As soon as the exchange rate is available in the market, we will buy your currency automatically.
Stop Loss Order
Stop-loss orders prevent you from losing out should the markets take a downturn. This is useful if your budget factors in the lowest exchange rate you need to achieve to not be negatively affected by market volatility.
Limit Order Case StudyAn electrical supplier anticipates a large stock purchase in 6 months time and wishes to exchange $250,000. The current exchange rate from USD to GBP is low at 0.725. In order to prevent a significant loss, the company takes out a limit order with NewbridgeFX to exchange at a higher rate of 0.835 within 6 months. The exchange rate increases within 4 months at which point their funds are automatically converted saving the company over $32,000.
Stop Loss Order Case Study
A retired couple wishes to repatriate their saving of £500,000 from the UK to the USA. They want to get the best rate for the conversion so they have taken out a Limit Order at 1.225 and also a Stop Loss Order at an exchange rate of 1.125. The exchange rate declined, however, the Stop Loss order automatically exchanged their money for $562,500 before it lowered significantly more. Had they exchanged their money 2 months later, they would have exchanged for $525,000, which is $37,000 less they would have received.
Using Market Orders to manage exchange rate risk.
Market orders are a useful tool to manage exchange rate risk. It is common for limit orders and stop loss orders to combine to form part of a currency risk management strategy, alongside spot contracts and forward contracts.
- 40% of the USD value purchased as a forward contract at a rate of 1.30
- 40% of the USD value set as a limit order to buy USD at a rate of 1.33. This includes a stop loss order to buy USD at 1.25 to protect the downside should the USD strengthen against the GBP
- 20% of the USD value to buy at the spot rate in 12 months’ time when the payment is due to the supplier
While this is a basic example, it demonstrates that the company has secured 40% of the USD value they need to buy at a rate of 1.30. They have the potential to buy another 40% should the market move in their favour and reach 1.33, while protecting against a sharp downturn. Lastly, secure 20% of the value at the spot rate in 12 months’ time.
Once the market orders are set there is no obligation on the company to fulfil the orders as long as the target rate is still outstanding. This means they are able to alter the exchange rate targets as time goes by. In the above example, should the rate continue to increase to 1.35, the 40% market order would have executed, and another order for the remaining 20% value can be set to take advantage of rates continuing to strengthen.
NewbridgeFX can help you to set, and amend your risk management strategy to help you mitigate risk and maximise your returns.
Market orders are instructions to a specialist foreign exchange broker, such as NewbridgeFX, to buy or sell currencies at a specific exchange rate that is not yet available in the market. Market order types are either Limit Orders or Stop Loss Orders.
An instruction to buy or sell currencies at an exchange rate above the current market levels. Useful if you want to achieve a higher exchange rate in the future should the exchange rate strengthen.
An instruction to buy or sell currencies at an exchange rate below the current market levels. Useful if you want to protect yourself against a downturn in the currency markets, and to budget for the minimum exchange rate you would want to achieve.
Buy setting a Market Order it is possible to secure a target exchange rate in the future, which allows for better budgeting. By setting a Market Order, NewbridgeFX will watch the currency markets on your behalf and execute the transaction should the exchange rate be achievable. This enables you to focus on your business, without having to check the exchange rates on a daily basis.
Market Orders are not guaranteed. While NewbridgeFX will watch the markets and execute should the target exchange rate be achievable, if the market does not reach the levels set then the market order will remain outstanding. Should this be the case, and the time had come to book a transaction anyway, then you would have to book at the Spot Rate on the day. Should this be the case, and the time had come to book a transaction anyway, then you would have to book at the Spot Rate on the day.
NewbridgeFX offers a specialist service in the deliverable foreign exchange market, promoting a range of products and services, available online or over the phone. Our products have been designed to meet the needs of our clients. A lot of these products are ways for businesses, and individuals, to manage and mitigate currency risk, and are used frequently during times of increased volatility. Alongside up to date market news, which works in tandem with our range of products.
We strive to earn the loyalty of our clients by consistently delivering a dedicated, professional foreign exchange service, and focusing on providing a great client experience. We have a vast and varied client portfolio. Our experience and expertise in managing international payments applies across a wide range of industries, from accountants to warehouses.
Having worked with them for sometime now, I’m happy to say they have consistently demonstrated a personal and dedicated level of service above and beyond that offered by my bank and previous provider. Its refreshing to work with a company that really cares about their client. Always recommending to anyone with an FX exposure.
Amazing service, every occasion my funds have arrived on or before the date quoted. They also notify me of market movements which effect my bottom line along with educating me on why the markets react. We currently make a large volume of payments and I have tried a few other providers and nothing compares to the professionalism they offer and I need for my business.
Multi Currency Account for Business
Enable your customers pay you in the currency of their choice, without asking them to convert. Receive funds in your company's base currency and any combination of currencies we support.
Create And Manage All Your Beneficiaries
Add and manage your beneficiaries, perform bank account validation & verification checks as you enter your beneficiary details & bulk upload multiple beneficiaries via a CSV file.
Make Fast & Secure Payments To Over 200 Countries
Real time Swift and local payments are settled the same day, within minutes of processing (currency/country dependant), and payment tracking capabilities allow you to keep updated on the payment status.
Hold multiple currencies and access balance information in supported currencies. Receive, convert, send and move money between your multi-currency accounts without making payments.
Convert Over 100 Currencies, 24/7, Using Multiple Devices
We provide informative, up to date market news, including updates on currency movements, upcoming economic events and announcements that impact the foreign exchange market.
Real-time Reporting And Tracking
View and track all conversions, payments and incoming funds using our online platform, and receive email notifications when funds have been received, conversions processed and payments released.