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Getting the best possible exchange rate is important whenever you send money overseas, but sometimes current market conditions don’t allow you access to the rate you want. This is where limit orders come to the rescue. A limit order allows you to choose the exchange rate at which you want to buy or sell a currency and your order will only be executed when the rate you want is available. These flexible tools offer a convenient way for you to stay on top of market developments, hedge your transfer and get the exchange rate you want for your transaction.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.
Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
What is a limit order?
A limit order allows you to choose a target exchange rate for an international money transfer - that is, the rate at which you are hoping to convert your Australian Dollars into another currency to be sent overseas.
This is a very flexible money transfer option that effectively allows you to keep pace with market developments and send money overseas at an exchange rate suitable to you. You can leave your order in place for up to six and even 12 months - if your desired exchange rate is achieved then the order will be triggered, but the order simply won’t be placed if the target rate does not occur.
How do limit orders work?
Trading on global currency markets occurs 24 hours a day, which might ordinarily mean that you might miss out on an attractive exchange rate overnight while you’re fast asleep. Limit orders are basically a way for you to get your money transfer company to monitor currency markets for you.
All you have to do is tell your money transfer provider your desired rate, how long you’re willing to wait for the order to be placed, the currency you wish to buy or sell and the amount you wish to purchase. You can then sit back and wait as your money transfer provider watches currency markets to see if your desired exchange rate can be achieved - if it can, your order will be placed.
For example, with the current exchange rate at 1 AUD = 0.69 USD, Greg isn’t quite prepared to send a transfer of $25,000 to the USA until he can get a better rate. He places a transfer limit order and nominates a target rate of 1 AUD = 0.74 USD, and when that rate is reached five months later, the transfer is triggered and Greg’s funds are sent overseas.
What are the types of limit orders?
This article deals with limit orders solely in regards to international money transfers; however, limit orders can be an effective tool across a wide range of investments including shares and commodities.
The company’s exchange rates. It’s important to check the exchange rates on offer from each money transfer provider to determine how close they are to the mid-market rates. This will give you a better idea of how much the market will need to fluctuate in order for the transfer company to be able to offer you the rate you want.
Fees charged. In addition to any transfer fee you will have to pay as standard, will you have to pay an extra fee when you place a limit order?
Length of order. How long will your order be valid for? Some companies will offer orders for up to 12 months while others will only allow you to place orders for 12 months.
How the order can be placed. Can you place a limit order online, over the phone or maybe using a mobile app?
Minimum amount. Is there a minimum limit you are required to transfer using a limit order? For example, limit orders placed with OFX need to be for amounts larger than $30,000.
Notification process. How will each provider notify you once your order has been placed?
One thing to be wary of after placing a limit order is growing impatient and just accepting the current rate on offer, while another is the fact that you may have to wait months for your order to be executed and you could forget about it.
The other disadvantage of limit orders is that the exchange rate could keep on improving after your desired rate has been reached, but because you’ve already locked in your order you will be unable to take advantage of the rising market rate.
Frequently asked questions
This varies between companies but common deadlines include six or 12 months.
You’ll need to let your transfer provider know our target rate, the amount of currency you wish to purchase, how long your order will be valid for and the currency you want to buy or sell.
No, orders are binding once triggered.
A forward contract allows you to lock in an exchange rate today for an international money transfer that won’t actually take place until a date up to a year away.
If this occurs your funds will simply not be transferred.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs.
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