If you're making a payment in a volatile market and aren't operating under a deadline, you may want to consider a market order for your next money transfer.
23. Dezember 2020 — 5 min read
If you need to send money overseas, sending it on the spot and crossing your fingers for a good rate isn’t your only option. (Thank goodness!) There are several ways to get the most out of your foreign exchange transfers, whether you’re hoping to get it done by a certain date or get the best possible rate. One of such is the market order, and it's available to everyone. But what exactly is a market order and how does it work?
Remember how we described forward contracts as the “buy now, pay later” transfer option? Market orders would be the “buy now, transfer later” option.
When you make a market order, you can specify your target rate at which you’d like to exchange your currencies. The current rate doesn’t matter: the markets are constantly moving, and you’ll never know when your desired rate will be live.
After you’ve placed your market order and set your target rate, your work is done, and now it’s up to the markets. Once your rate is live, your currency will automatically be purchased, allowing you to transfer currency at your ideal rate.
The foreign exchange market is volatile and unpredictable. Nonetheless, you can monitor the market and come up with a clear-cut currency strategy that allows you to get the most out of your foreign exchange transactions, without having to constantly check the rates.
With a market order, you can easily set an exchange rate you want for your currency and once your target is met, the transaction is initiated automatically. This gives you the opportunity to get the highest value for your currency regardless of how volatile the market is.
It allows you to customize your market order by setting the amount, exchange currency, value date, and validity.
You can choose a desired target exchange rate to either stop-loss, make -profit, or get the best of both.
Your market order triggers automatically once your target rate is reached.
Since the process is automated, you’re not required to keep monitoring the market for the best rates.
You can sit back and relax without bothering about the volatile nature of the foreign exchange market!
A market order allows you to get the best out of sending money at your most preferred exchange rate and to prevent the undesirable effects of the unstable foreign exchange market. Once you set a market order, the online money transfer platform such as Xe monitors the foreign exchange rate movement, automates and completes the transfer on your behalf once the set rate is reached.
It’s an opportunity for you to benefit from an automated foreign exchange management system with minimal exchange rate risks.
You can use money order just about any time you want. However, certain situations make a money order the preferred choice for sending money. Here are the most preferred periods to use a money order:
To get the best of higher rates
To save money and time
To make the most of foreign exchange purchase
To create a safety net
To get the most out of your budget
To take advantage of favorable exchange rate
To manage foreign exchange risk
Depending on the currencies you want to transfer and what’s going on in the world at the time, your currencies could be subject to quite a bit of volatility. If you’re contending with frequent market motion, setting up a market order can help you to ensure that you’ll be able to make your transfer at the best possible rate, whenever that may be.
Market orders are also a great option for transfers that aren’t time-sensitive. Some transfers (such as bills or educational payments) need to be made by a certain date, but if your transfer doesn’t come with its own hard deadline, you can take advantage of market orders to make the most of your money in your transfer.
Managing the risks associated with the volatile nature of the foreign exchange market is important to getting the best rates for your money transfer. This is one of the key reasons why the market order is such a good option. Here are key reasons why you should consider currency risk management using a market order:
All your foreign transfers will be based on strategic decisions.
You’ll be able to forecast your international expenses.
You’ll know precisely what foreign exchange range will be used for your transfer.
You’re not required to keep monitoring the market to get the best rates.
Market order is automated so you aren’t bothered about missing the best rates.
You can use the volatile nature of the market to your advantage.
Unlike several other available money transfer methods, a market order isn’t the best option if you intend to transfer your money within a specific date. That’s if your money transfer has a deadline.
For example, some payments such as overseas mortgage, school fee or an emergency medical bill require payment within a specific period. Once you miss such a deadline, you’ll have to deal with the consequences that follow.
In such situations, a market order isn’t the best method for transferring your money. However, if your transfer doesn’t require any deadline or specific dates, a market order could be your best bet. Market orders are mostly suitable for money transfers that aren’t time-sensitive. It provides a perfect opportunity to sit back and wait for the best market rates before your transfer goes through.
Ready to set up a market order? It’s no more complicated than sending any other money transfer. If you don’t have an account, take just a few minutes and sign up for your free account first. If you’re already registered, visit our Money Transfers page to learn more about how you can get started.