CFD Frequently
Asked Questions

CFD Frequently Asked Questions

What is the difference between a trade and an order?


A Trade is an instruction to open or close a position immediately, whereas an Order is an instruction to do so at some point in the future if Our Price reaches a pre-specified level. There are two types of Orders available, Stop and Limit orders.




What is a stop order?


A Stop Order is an instruction to place a Trade at a specified price that is less advantageous to you than the level at the time of placing the order. This will only be executed should ‘Our Price’ reach the level of your order.




What is a trailing stop 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 when 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.




What is a limit order?


A Limit 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 ‘Our Price’ reach the level of your order.




What is the meaning of “phone dealing only” when I try to place an order?


This means that the order cannot be accepted over the trading platform and you will have to call us to check if you can place an order over the phone. There are various reasons for this, such as the stock is on trading halt, the stock is being suspended etc. For a more accurate reason, please contact our Client Management Team.




What is a guaranteed stop loss order (GSLO)?


Guaranteed Stop Loss Orders (GSLO) are only available on certain markets and can be used as protection against possible slippage. They ensure that the order will be executed at the exact level that you specify, regardless of whether the market gaps. A premium is paid for this, which can be thought of as insurance against gapping. Unfortunately, Guaranteed Stop Loss Orders are not available for all markets. To find out if a particular market offers GSLO and the premium charged, please refer to its Market Information tab on the Trading Platform.




How do I place a guaranteed stop loss order?


You can leave a guaranteed stop loss when you open your position, either online or by phone. You will be charged a small premium for placing your guaranteed stop. You can also add a guaranteed stop loss to an open position if it was not done at the outset by clicking on the ‘place stop/limit’ button on the relevant open trade within the open positions tab.




How is the guaranteed stop loss order premium calculated?


Different stocks have difference charges. This can be found in the “View Market Information” or “I” icon inside the trading platform. For example, The GSL premium for Singapore Index is 10 times quantity. This means that if you buy or sell 1 contract of Singapore Index CFD and attach GSLO, the GSL fee will be 10 x 1 contract = SGD 10.




What is slippage?


Slippage can occur if markets ‘gap’, This happens 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, then its share price may fall from $1.50 to $1.20, without trading at $1.30 and $1.40 etc. If this were to occur, then we would not be able to execute orders at prices where the underlying market did not trade. Orders would be filled at the next available price.




Can I amend stop loss orders when the market is closed?


Yes you can. However you are unable to amend Guaranteed Stop Loss Orders.




Can I amend/cancel orders and if so, how?


You can amend or cancel an Active Order by entering the 'Active Order' tab on the trading platform. You can amend or cancel a limit order or a stop loss order outside of trading hours, but not Guaranteed Stop Loss Orders.




Are orders active when markets are closed?


Orders are only monitored and executed during City Index trading hours (not necessarily underlying market trading hours). In the case where a market continues to trade outside of City Index hours we will execute any triggered orders at the first available price in our opening hours which may be different to the order level. However if the market has moved beyond the trigger level and returned by the time that City Index re-opens, the order may not be executed.




Why was my order rejected after it triggered?


Your order may have been rejected due to various reasons, including insufficient funds. Orders are filled subject to sufficient funds being in the account to meet the margin requirements at the time the order was triggered, and not when the order was placed.




What does trading as principal mean?


In conventional share trading, clients will deal through a broker who places their trade with a range of market makers. The stockbroker is acting as an agent, searching out the best price for their client. This is not the case with CFD trading. In this instance you are dealing with the provider (the principal) and are contracting directly with them.




How long can I hold a CFD for?


There is no expiry date for a CFD trade, but please remember that if you hold a long position you will be charged overnight funding. However please note that depending on the benchmark rate in that particular country that your trade relates to, you might still be charged financing on your short Share CFD position.




Can I hold both a long and short trade position for the same CFD market at the same time?


Yes you may, provided you tick on the hedge button under the deal ticket when placing the trade that you want to hedge.




What do I do if I have a trade query?


You can raise trade queries/disputes by contacting our Client Management Team.




Do corporate actions affect my account?


Your account is subject to any corporate actions occurring in the underlying market, where applicable.




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


CFDs 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 to/debited from your account around the ex-dividend date.





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Trading in leveraged currency contracts comes with substantial risk. You must be aware of these risks before opening an account to trade. High leverage amplifies gains as well as losses, leading to potential loss of the entire account balance. Trading in leveraged currency contracts may not be suitable for every investor. Never speculate using money that you cannot afford to lose.

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