Using a Limit Order

Automated Orders

EXCHANGE RATES & TIMING

A Limit Order can be used to automatically buy currency, should the market move in your favour.

You can set any rate you like, but of course the higher you aim, the less likely the order is to “fill”.

Limit Orders are “good until cancelled” and will be placed in the market on your behalf until they either fill (in which case we will inform you immediately) or are cancelled. You should discuss this type of order with your dedicated account manager at A Place in the Sun Currency before going ahead – you don’t need to send us any funds in advance, but once an order has been filled we ask for payment of the selling currency (usually Pounds) within a couple of days.

As currency markets move every second, 24 hours per day, through the week, Limit Orders can also reduce the need for you to track rates – even if markets move overnight to your desired level and then drop again, your currency would be automatically bought and we’d let you know in the morning.

If the limit order ‘Fills’

For a €200,000 purchase for a property completion, let’s say you use a Limit Order to aim for a rate 3% better than currently available. If the Pound then improves against the Euro by 3% between then and your completion, your currency will automatically be bought and you will have saved around £5,000 compared to the price if you had bought your currency on the day you placed the Limit Order.

Downsides of a Limit Order

Are there any risks?

The main risk with a Limit Order is that the market moves the wrong way and the order doesn’t fill. You would then be left forced to buy at a lower exchange rate than you had bargained for when you need your currency – so you would need to make sure you have some spare budget available to pay more for your property if the market falls, instead of rising.

On the other hand, once your Limit Order has “filled”, your currency is bought, and the rate can’t improve any further. So if the market continues going up even more in your favour, a Limit Order will also mean you can’t take advantage of any further savings.

If the limit order doesn’t Fill

For a €200,000 completion, let’s say you use a Limit Order but the market actually falls by 5% between then and your property completion, and you buy your currency just before the completion payment is due. You will have paid around £8,500 more compared to the price if you had bought your currency on the day of your Limit Order instead.

In addition, once you’ve placed your order, you are entering into a legally binding contract with us.

So it’s best to ensure you are definitely happy with the target exchange rate before you go ahead – it’s important to cancel the Limit Order if you decide to buy your currency with us or elsewhere instead, before it has filled. Otherwise you could end up buying your currency twice, which will typically incur losses to sell half of it back to the market again.

Everybody has different circumstances and attitudes to the risk presented by changing exchange rates. We will work with you to give you all the options available, in simple terms, to help you decide what’s best for you, and would only suggest using any type of automated order if you fully understand the process and potential implications for your budget.