How to Buy and Sell in CFD and Shield CFD Accounts with Market to Limit Orders

Most CFD providers have different types of trading orders for your convenience and risk management. The simplest way to trade is to use market orders, which is a buy or sell order at the best current market price. The other way is to use a limit order, which is to set a limit at which you will buy or are ready to sell.

Some brokerages allow you to place a market to limit order in your CFD account/s. A CFD provider may set conditions and define market to limit order differently for various types of CFD accounts.

Market to Limit Order: CFD and Shield CFD Accounts

 Shield CFD account is an account where your liability is limited and you cannot lose more than the amount in your account. In these accounts, market to limit order means that you place and order within a price range. If the product provider does not want to trade within this price range, the order will not be executed.

There may be, at times, situations when there is a lack of liquidity in the underlying reference instrument (the asset that a CFD refers to) in the underlying market. Liquidity in this case implies the number of underlying reference instruments available for buying or selling at a given price. If you are trading on an electronic trading platform, the CFD provider will execute your order within your requested price range in a way that it reflects this lack of liquidity.

Market to Limit Orders: DMA CFD Accounts  

The definition is slightly different in these accounts, which are Direct Market Access CFD accounts. Here it is an order where you want to buy or sell at the current bid or offer price. A buy order is executed at the lowest offer price at the time of the order and a sell order is executed at the highest bid price.