Example 1:
Spot Rate of AUD/HKD = 5.50
You may want to buy AUD at a lower price in the future, such as 5.40. You can place an order to buy AUD at AUD/HKD = 5.40. The order will only be executed if the price of AUD/HKD drops to the specified price (i.e. AUD/HKD = 5.40). The order will lapse if the price does not reach the target until expiry.
Example 2:
Spot Rate of AUD/HKD = 5.50
You have holdings in AUD bought at AUD/HKD = 5.50. You may want to lock in the potential gain, such as when it rises to AUD/HKD = 5.60. You can place an order to sell when the market rises to a specified price (i.e. AUD/HKD = 5.60). The order will only be executed if the price of AUD/HKD rises to AUD/HKD = 5.60. The order will lapse if the price fails to rise to the specified target until expiry.
Example:
Spot Rate of AUD/HKD = 5.50
You have holdings in AUD bought at AUD/HKD = 5.50. You may want to limit the potential loss, such as when the rate falls to AUD/HKD = 5.40. You can place an order to sell when the market falls to a specified price (i.e. AUD/HKD = 5.40). The order will start to execute at the market price once the price of AUD/HKD drops to AUD/HKD = 5.40. The order will lapse if the price does not fall to the specified price until expiry.
Example:
Spot Rate of AUD/HKD = 5.50
You have holdings in AUD bought at AUD/HKD = 5.50. You may want to lock in your profit, such as if AUD/HKD pricing goes up to 5.60, and at the same time limit your loss, if the pricing of AUD/HKD falls to 5.40
You can place an OCO order to take profit when AUD/HKD = 5.60 or stop loss when AUD/HKD = 5.40. The execution of one order would cancel the other order. And both orders will lapse if the price does not reach either 5.60 or 5.40.
Example 1:
Spot Rate of AUD/HKD = 5.50
You may want to buy AUD at a lower price in the future, such as 5.40, and subsequently lock in the potential profit. You can place an order to buy AUD at AUD/HKD = 5.40 and place another order to take the profits when AUD/HKD = 5.60.
The buy order will only be executed if the price of AUD/HKD drops to the specified price (i.e. AUD/HKD = 5.40). The order will lapse if the price fails to reach the specified target until expiry.
Only if the buy order has been executed will the subsequent sell order be initiated. The second order will lapse if the price does not reach 5.60 until expiry.
Example 2:
Spot Rate of AUD/HKD = 5.50
You may want to buy AUD at a lower price in the future, such as 5.40, and subsequently limit potential loss. You can place an order to buy AUD at AUD/HKD = 5.40 and place an order to stop losses when AUD/HKD = 5.30.
The buy order will only be executed if the price of AUD/HKD drops to the specified price (i.e. AUD/HKD = 5.40). The order will lapse if the price does not fall to the specified price until expiry.
Only if the buy order has been executed will the subsequent sell order be initiated. The second order will lapse if the price does not reach 5.30 until expiry.
Example:
Spot Rate of AUD/HKD = 5.50
You may want to buy AUD at a lower price in the future, such as 5.40, and subsequently either lock in the potential profit or limit the potential loss. You can place an order to buy AUD at AUD/HKD = 5.40 and an OCO order to take profit when AUD/HKD = 5.60 or stop loss when AUD/HKD = 5.30.
The buy order will only be executed if the price of AUD/HKD drops to the specified price (i.e. AUD/HKD = 5.40). The order will lapse if the price does not fall to this until expiry. Only if the buy order has been executed will the OCO order be initiated. For the OCO order, the execution of one order will cancel the other order. Both orders will lapse if the price fails to reach 5.60 or 5.30 until expiry.
