I've read there are many ways currency specialists can help with transferring money abroad but I'm a bit confused by the different terms they use. Could you briefly outline the differences between spot deals, forward contracts, stop orders and limit orders. Melanie Rydell,

The confusion surrounding the terms mentioned in this question is perfectly understandable, currency transfers are uncharted territory for most people.

The aptly named Spot Contract is the most basic and popular foreign exchange product. Spot Contracts are used when currency is required immediately. It enables you to buy the currency at today's live rate and the currency will be available to you on receipt of your cleared funds, usually within 2 working days.

Forward Contracts are a "buy now - pay later" solution to avoid currency market risk and guarantee your budget. You will be able to lock into an exchange rate today for currency that you need up to 2 years in the future. All that is required is a deposit (of around 10% usually). The balance is only required on the delivery date of the contract and can remain in your bank account earning interest. Forward Contracts are widely used by property buyers as transactions often take weeks or months to conclude, leaving buyers exposed to a volatile currency market. They are also useful for stage payments on new builds.

Stop Loss Orders allow you to specify the minimum exchange rate you need to achieve and the Stop Loss will automatically ensure that your currency is purchased if the exchange rate falls unexpectedly. This allows you to hold out for a better exchange rate while protecting yourself against a sudden fall in the market.

A Limit Order lets you take advantage of sudden favourable movements in the exchange rate. Determine the exchange rate you are hoping to achieve and your currency will automatically be purchased if the market reaches your desired level.

A Stop or Limit Order can be placed with reference to a Spot or Forward Contract. The explanations behind the terms are re ally very simple. It is important to know the options available to you and to use the contract best suited to your currency requirement.