Price Tolerance provides an effective way to mitigate the risk of unexpected volatility.
A Limit IOC (Immediate-or-Cancel) order will only be executed if a price can be obtained within your pre-defined price range, with any potential price improvements being passed on to you.
- When selling, Price Tolerance defines the minimum price differential that you are comfortable accepting. Price Tolerance is subtracted from the current Bid price and is displayed as a limit price on the trade tile.
- When buying, Price Tolerance defines the maximum price differential that you are comfortable accepting. Price Tolerance is added to the current Ask price and is displayed as a limit price on the trade tile.
Price Tolerance can be applied when trading FX Spot, FX Forwards, CFD Indices, Commodities, Interest Rates, and Bonds. Price Tolerance is expressed in pips, ticks, or percentage points.
By removing Price Tolerance the trade tile will convert the order type from a Limit IOC order to a Market IOC order for FX Spot and FX Forwards, and a Resting Market order for all other product types.