Hence, they hire someone else instead in their behalf to do the nitty-gritty of things. However, how do the parties involved communicate? Of course, the brokers would still be getting instructions from the primary investors. Do the brokers call the investors every single time that they will be making decision? If so, then timing would be an issue here. What if the investor cannot be contacted when the time that the broker needs to decide on something? This may lead to losing the chance in seizing the moment while the opportunity is there.
It is in this light that orders are made. As its name suggests, these are instructions that can be issued before entering the platform or while in the middle of trading. These orders are being executed when the conditions are met. Hence, the brokers no longer need to contact the investors in every step of the way. Doing the latter would just be too annoying for both parties.
With the foregoing, there are, in fact, several spread betting order types that are popularly being used by many investors and brokers. Among these orders are the following:
1. Good ’till cancelled (GTC) order
It is an order that is being used by many investors in order to maximize their profits to the fullest that they want. As its name suggests, it is the order that is effective until the trader cancels it. Hence, the broker cannot just close it in the middle of the trading day without any instruction from the trader. However, this is not applicable at all times. This is because it is only advisable to use if the trader is expecting the market to continue going to its current direction, whether up or down, depending on the position.
2. Guaranteed stop loss order
On the other hand, another kind among the spread betting order types is the guaranteed stop loss order. This is, in fact, considered as the most common one. This is a safety net or protection for the trader, which is being executed in order to limit the losses that the position may incur. For instance, the traders can determine a specific amount that will be maximum level of losses that they can tolerate. If such level is met, then the position will be closed accordingly and automatically.
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