LONDON, August 19, 2011 /PRNewswire/ --
London's FTSE 100 index, Germany's Dax and Wall Street's Dow Jones all lost ground on 18th August as the uncertainty behind the recent financial turmoil continued. To help traders react quickly to this kind of market volatility, spread betting provider City Index (http://www.cityindex.co.uk/) offers OCO (one-cancels-the-other) orders.
A one-cancels-the-other order allows a trader to take two positions on the same market by placing two different opening orders simultaneously. When a price movement triggers one of the selected OCO points, that order will be executed while the remaining order is automatically cancelled.
Example of an OCO Order
Imagine non-farm payroll numbers are due for release at 1:30pm and you want to trade the direction resulting from the announcement. The market is currently at 5500, so you place one OCO order to buy at 5550 and another to sell at 5450. This way, whichever order is hit first will execute and the other order will be cancelled. Therefore you are in position to react effectively and trade whichever direction the price moves in.
The key advantage of OCO orders is their speed. Even with the benefit of in-depth market analysis, no trader is able to react quicker to developments than an order which executes automatically at a trigger price point. Of course, you should also employ appropriate risk management measures such as stop loss orders at all times.
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About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through City Index trading platforms.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. To open a spread betting account with City Index, visit http://www.cityindex.co.uk/spread-betting/start-spread-betting.aspx
SOURCE City Index