It is a type of trading order in which the market price is different from the order price. In passive order, forex trader fixed a fee that a security or currency pair must range afore they go ahead with buying or selling. A passive order took place when trader settled a new price which is dissimilar from bid-ask price.
There is a time limit for the passive order to be executed, if it is not performed at a specified period, the charge is cancelled or expired automatically, and the trader has to place a new one. Passive order is the opposite of an aggressive order, and a passive order waits for the price while aggressive order chases the price.
A passive order occurs when buying or selling stock or other instruments take place. For selling, passive order is placed above the bid price while for buying, it is placed below the asking price. For example, let suppose that bid price for GBP/USD is 1.2570 and ask price is 1.2571. When a trader wants to buy or sell the currency pair, they have to place a passive order. They have to put a buy order below the asking price and sell order above the bid price.
The passive order is executed when the market price reaches the set value. As we know that passive order is placed below or above the market price, so it is not directed immediately. The trader has the opportunity to withdraw the declaration before it is filled.