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Orders and positions FAQs

Find out all about orders and positions with our FAQs, covering the different types of orders available, how to place a trade or order, hedging your position and more.
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Orders and Positions
Orders and positions

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What is the difference between a trade and an order?

You can place trades to open or close a position immediately, whereas an order is an instruction to do so at some point in the future if the price reaches a pre-specified level.

How do I place a trade or order?

You can place trade or orders via any of our trading platforms. If you would like more insight into optimising your trade entry, please refer to our Trading Academy. These are short videos that walk you through a number of key areas of our online trading platform.

You can also place trades/orders over the telephone by calling our client support team; however, the minimum trade size for phone trades may be higher.

Further information is available in our learn to trade guide.

What is slippage?

Slippage can occur if markets 'gap'. This is when prices either jump or fall from one price to another without trading at every increment in between. This can happen when the market adjusts to news; for example, if a company announces worse than expected profits, its share price may fall from 100p to 90p, without trading at 99p, 98p etc.

If this were to occur then we would be unable to execute orders at prices where the underlying market did not trade; orders would instead be filled at the next available price. While slippage can mean your trade is filled at an undesirable level, you may still benefit from positive slippage on limits.

What is a stop loss order?

A stop loss order is an order that is attached to an open position to limit the risk of a market moving against you. Stop losses are used to close trades at a predetermined level, and they limit the amount you could lose on a trade. Using a stop loss is an essential part of maintaining an efficient trading strategy.

If the open position is closed, either by an opposing trade or order activation, then the stop loss will be cancelled.

Example

If you enter into a long UK 100 trade at 7300, you may choose to leave a linked stop loss order at 6400. Then if the market’s price falls by 100 points, we will automatically close your trade, helping you to avoid any further losses.

Please note that orders may be subject to slippage; see below for more details.

What is a stop entry order?

A stop entry order is an instruction to place a trade at a specified price that is worse than the level at the time of placing the order. This will only be executed should the market reach the level of your order.

Example

If the UK 100 is at 7350, you may choose to leave a stop entry order to sell 10 CFDs if the level falls to 7250. Then, if the the market's price falls by 100 points, we will automatically open the above trade for you.

Please note that orders may be subject to slippage, see below for more details.

What is a limit entry order?

A limit entry order is an instruction to place a trade at a specified price that is more advantageous to you than the level at the time of placing the order. This will only be executed should the market's price reach the level of your order.

Example

If the UK 100 is at 7300, you may choose to leave a limit entry order to sell 100 CFDs if the level reaches 7400. Then if the market's price rises by 100 points we will automatically open this trade for you. For more information on limit orders, see our guide to orders page.

Please note that orders may be subject to slippage; see below for more details.

What is a limit closing order?

A limit closing order (or take profit) is linked to an open position on your account. Limits are designed to close trades at a predetermined profit level.

If that open position is closed, either by an opposing trade or by an order activation, then the linked limit will be cancelled.

Example

If you enter into a long UK 100 trade at 6500, you may choose to leave a linked limit order at 6600. Then if the market's price rises by 100 points we will automatically close your trade, helping you lock-in your profit and protect it in case the market's price were to fall again.

Please note that orders may be subject to slippage.

What is a guaranteed stop loss order?

A guaranteed stop loss order (GSLO) is an order that closes your trade at an exact level chosen by you, regardless of market gapping. A regular stop loss may incur slippage in times of heightened volatility where markets can “gap” between one price and the next without trading at the prices in between.

At City Index, you can add a guaranteed stop loss to a wide range of over 13,500 markets and will only pay a premium for added protection if your GSLO is triggered.

How do I place a guaranteed stop loss order?

You can leave a guaranteed stop loss order when you open a trade either online or by phone. You may also add a guaranteed stop loss order to an existing trade provided it is within trading hours. For orders placed via the trading platform, you need to select the 'guaranteed' box next to the stop loss value. 

You will only be charged a premium for your GSLO if your order is triggered. Please be advised that you can place/amend/update your GSLOs within market hours for free, although minimum distances apply. Minimum distance will be shown on the deal ticket.

What is a trailing stop loss order?

A trailing stop loss order is a powerful risk management tool, helping you to minimise potential losses without setting a limit on your potential gains. 

A trailing stop is created by setting a stop order that 'trails' your position by a specific number of points. If your trade moves in your favour, the trailing stop moves with the market, executing only if the market moves against you by the set number of points.

The trailing stop is more flexible than a fixed stop loss, since it automatically tracks the market's price direction and does not have to be manually reset, as you would have to with a fixed stop loss.

How do I amend/cancel orders?

You can amend or cancel orders by clicking on the 'amend stop & limit' button, which can be found in the 'active orders' tab on the trading platform.

Am I able to amend orders at any time?

Yes, you can amend orders on your positions at any time, including outside of markets hours. GSLO are the only exception to this and can be amended only during market hours.

Are orders active even when the markets are closed?

Orders are only monitored and executed during City Index trading hours (and not necessarily during the underlying market trading hours). We will execute any triggered orders at the first available price in our opening hours for cases where the markets continue to trade outside of City Index hours. Therefore, this may be different to the original order level if the market has gapped.

Why was my order rejected after it triggered?

Your order may have been rejected due to a number of reasons, including insufficient funds. Orders are subject to sufficient funds being in the account at the time the order was triggered, and not when the order was placed.

How long can I hold my positions for?

For spread bets, through our daily funded trades (DFTs) you are provided a long-term settlement date and your P&L is only calculated when you either close or partially close your trade.

In the case of CFDs, there is no expiry for a CFD trade (unless it is a CFD future) and you may hold it for an unlimited period – as long as you have enough funds in your account to cover margin. Please remember that you will, however, be charged a daily overnight financing fee for both CFDs and spread bets.

Futures contracts work differently and you can trade the price of futures markets using CFDs and financial spread bets. Futures contacts have a month and an expiry date when the contract will expire – e.g. Crude Oil June, which is when the contract expires. You can choose to close your position at the expiry of a contract or roll your contract into the following month.

Can I roll my futures position, and how do I do this?

Yes, you can roll your futures position. How to do this depends on which product you are trading.

For spread bet futures, simply select the 'autoroll' button via the open positions tab on the trading platform. This will then roll your position into the next contract on expiry.

For CFD futures, you cannot roll CFD futures via the internet. Please call Client support on 0800 060 8609 to do so.

Get in touch if you have a query about an order being rejected.

Why has my position been closed?

Positions may be automatically closed out either due to an attached order triggering, a futures contract reaching expiry or due to your margin falling below the margin close out level. Please see the margin and leverage section for more information about our margin policy.

What do I do if I have a trade query?

You can raise trade queries/disputes by calling our Customer Support Team.

What is a corporate action?

A corporate action is an event initiated by a company that will affect all positions in that market. Some of these will have a direct action on the price such as dividends, some are indirect such as stocks splits and some have little to no impact such as a name change.

Do corporate actions affect my account?

Yes, your account is subject to any corporate actions occurring in the underlying market. All corporate actions (excluding dividends) will be emailed to you prior to the event. This is known as the instruction date. Depending on the corporate action, you may have to make a decision about what you would like the positions on your account to do. You will have until the instruction deadline date noted in the email to decide. Corporate actions are free of commission.

Please note that in the event of any positions being closed and reopened, working orders will be cancelled.

Do I receive dividends in the same way as if I was holding shares?

Yes, CFDs and spread betting accounts are subject to dividend adjustments intended to replicate the net dividend payment applicable to the ordinary share.

A dividend adjustment is credited to long positions and debited from short positions held at the close of business on the day before the ex-dividend date. Payment is then credited/debited to your account around the ex-dividend date. Dividends should not result in a profit or loss impact on customers' accounts, as the underlying instrument will open lower on the ex-date by the amount of the dividend.

Where can I find margin requirement, spreads and minimum stake sizes for markets?

This information can be found by clicking on the market information icon for a specified market. These are located immediately to the right of the trade and order buttons on the trading platform.

What is your minimum market cap for US/UK/European stocks that I can trade?

There is no set minimum market cap but we are reluctant to offer markets for UK stocks with a market cap of less than £50 million and US stocks with a market cap of less than $1 billion. If you wish to short a market then the minimum market cap will be higher. Please contact client support if you wish to enquire about trading a market that we are not listing.

Does the daily change indicator on the trading platform show the change on the day for each market?

Our daily change indicator will reflect the movement of each market on that day. However, as many of our markets run outside of market hours, such as the FTSE 100 (UK 100), the daily change may not accurately reflect the daily change during underlying market hours. As such, our daily change indicator is an indication only. Please use the bid and offer on out trading platform for accurate quotes.

What is price tolerance?

Price tolerance is a setting that determines how much slippage you are prepared to accept so your order can be filled. Markets are updating multiple times a second, and we will process your trade when we receive your request. If the price has moved between the submit time of a request and when we receive it, the price may differ. Price tolerance enables you to limit that difference. If the price moves in your favour, we will always honour that price, however large the improvement.

How do I adjust price tolerance?

If you want to change your price tolerance level, you can do so by amending the tolerance levels set within the market information for each market affected by price tolerance (see below image). 

If, however, you want to remove price tolerance completely, you can do so by setting the price tolerance level to '0' for the relevant market. This will mean that should our trade execution price move, you will need to submit a new trade request. 

Look at the example below using the Vodafone Group (LSE) DFT market information: 

Order and positions price tolerance

Can I hedge positions in my account?

Yes, we allow you to go both long and short in the same market on a non-FIFO basis. FIFO stands for 'first in first out'. If you have multiple trades in the same market, the first position to close is the first position placed in that market.

FIFO is the standard setting for CFD and spread betting accounts, but you can disable it by turning on ‘hedging’ in Web Trader or our mobile apps.

Non-FIFO allows you to open and close positions in the same market in any direction you wish. It doesn't prevent you from closing the first trade you placed, it simply gives you greater flexibility to open and close multiple positions in multiple directions. All our FX Accounts are non-FIFO.

Example

If you are long on the UK 100, you can also go short on the UK 100 to hedge all or some of your original trade. In order to do this, you must use the hedge button.

How do I hedge my positions?

When you launch the deal ticket, you'll see a tick box option to hedge. If you tick this box, this will open a new position in the direction you've chosen, regardless of whether you currently have any open positions in the same market. If this is the first position within a particular market, the button will have no effect as effectively; there is no original position to hedge.

Hedge example

  1. You have an open sell 10 CFDs in the Wall Street market
  2. You launch a new Wall Street deal ticket
  3. You decide to buy 5 Wall Street CFDs
  4. To place this trade independently of your original short position, you need to tick the hedge button and place the trade. Please note that if you don't tick the hedge button, this will effectively close 5 of your original short position
  5. You now have two positions open in the Wall Street market. One buy position of 5 and one sell position of 10, meaning you are now net short 5 in total.
  6. You can also close either position independently at any time
Order and positions hedge my positions 
You must also be aware that if you have amalgamated positions turned on, this will show the net figures for the total trades placed i.e. inclusive of all shorts or longs in a specific market. To see individual positions, you need to expand the amalgamated position or switch to single positions.

How does margin work with hedging?

You're only charged margin on the larger side of the trade. Using the example above, you would only have been charged margin on the original Wall Street short 10 position, and not any hedged trade thereafter which is smaller than the initial trade.

Trade example

  • You sell 2 Wall Street CFDs with an initial margin of $2,400
  • You then open a buy 1 Wall Street CFD with a margin of $1,200 (hedged trade)

As the margin is bigger on the open 10-CFD trade, this will be the total margin required for all trades in this market. We do this to ensure that you have enough margin to cover the remaining position if and when the larger side is closed. The same rule applies for all step margin levels.

How does financing work with hedged trades?

Finance charges work on a per-trade basis. This means you'll be charged overnight financing charges relating to each of the trades you place, regardless of whether they are a hedged position or not.

How do corporate actions work with hedged trades?

Corporate actions will be applied on a per-trade basis, not as an overall value.

How are non-expiring commodities (NEC) priced?

To price non-expiring markets, we use two sufficiently liquid futures contracts on the underlying commodity. These are usually the two with the nearest expiry dates.

The contract with the closest expiry date is called the front month contract and the second-nearest expiry date is called the far month contract.

Throughout the duration of the front month contract, while we use this price to drive our own, the price of the NEC will gradually move towards the price of the far month. We may use further months should the near, far or both months become unsuitable for trading.

There is an adjustment to the NEC Market price every day to move towards the far future. Your account will be subject to an adjustment in the form of a credit/debit to offset this price adjustment. For example, if the NEC contract is adjusted by +2 points, clients with long positions will be debited 2 x stake and clients with short positions will be credited 2 x stake. See further explanation and video below.

In our video, the front month is labelled ‘A’ and the far month ‘B’.

NEC contract market prices move towards the price of market ‘B’ as the expiry date of ‘A’ becomes closer. The price of market ‘B’ may be higher or lower, depending on the commodity, than that of market ‘A’.

Daily adjustments for NEC contract markets reflect a day’s movement from the current price towards ‘B’.

There is also a separate ‘cost of carry’ which is an adjustment in the price to reflect the holding cost of the asset and make the market a true cash asset. This amount recognises the reduction in the days to expiry between the cash and futures. This cost of carry is always positive, and a naturally offset by the financing cost paid or received daily on longs and shorts respectively.

What is a 'limit down'?

A limit down price is the maximum sell-off permitted in a market on a single day of trading. Once this level has been reached, trading on the market may then be restricted to prevent significant volatility and potential panic selling. A limit down price is typically determined as a percentage decline in a given market, rather than a nominal decline in price.

A limit down period is imposed by an exchange (such as the NYSE) and not by brokers. It usually lasts 15 minutes but may be extended depending on the percentage decline before market open.

Please note that a limit down only restricts selling on the affected market(s).