Margin calculations depend on the type of trading instrument: “Forex Trading”, “Metals”, “Energies”, “Indices”, “Cryptocurrency”.
1. For instruments mentioned on the “Forex trading” tab margin depends on the leverage of the trading account, base currency, contract size and Margin percentage of the specific trading instrument. In MT4 specification such Margin calculation mode is called “Forex”.
Margin: lots * Base Currency * contract size / leverage * Margin percentage / 100
For example: Margin for 1 lot for EUR/JPY at 1:3000 leverage= 1 * 1.2152 * 100000 / 3000 * 100 / 100 = 40.5 USD
2. For “Metals” margin depends on the leverage of the trading account, contract size, market price and Margin percentage of the specific trading instrument. In MT4 specification such Margin calculation mode is called “CFD-Leverage”.
Margin: lots * contract size * market price / leverage * Margin percentage / 100
For example: Margin for 1 lot for XAU/USD at 1:3000 leverage= 1 * 1808 * 100 / 3000 * 100 / 100 = 60.26 USD
3. For instruments from the tab: “Energies”, “Indices”, “Cryptocurrency” margin depends on contract size, market price and Margin percentage of the specific trading instrument. In MT4 specification such Margin calculation mode is called “CFD”.
Margin: lots * contract size * market price * Margin percentage / 100
For example: Margin for 0.01 lot for BTC/USD (leverage of the account doesn’t influence the calculations) = 0.01 * 1 * 54380 * 10 / 100 = 54.38 USD
Calculation of price per point depends on contract size, Exchange rate of quote currency to USD and lot. All the calculations below are done for 1 point - minimum size of price movement. There are three main types of rates: Direct rate, Indirect rate and Cross rate based on which Exchange rate is calculated.
1 point value = (1 Point / Exchange rate of quote currency to USD) * Lot * Contract size per Lot (from trading instrument specification)
1. Direct rate - if the USD is in the denominator of the quote (gbp/USD, eur/USD and so on) price per 1 point per 1 lot always will be 1$. As the rate is direct - Exchange rate of quote currency to USD will be always 1: USD/USD = 1.
Point value for gbp/USD: 1 Lot of gbp/USD: (0,00001 / 1) * 1 * 100,000 = 1 USD
Point value for xau/USD: 1 Lot of xau/USD: (0,01 / 1) * 1 * 100 = 1 USD
2. Indirect rate -if the USD is in the numerator of the quote (USD/jpy, USD/cad and so on), price per 1 point will be calculated a bit different way, as Exchange rate of quote currency to USD - is the exchange rate of the denominator currency to USD (USD/***)
Point value for 1 lot of USD/jpy: (0,001 / 104.29) * 1 * 100,000 = 0.96 USD (usd/jpy = 104.29)
3. Cross rates - if the USD not in the denominator and not in the numerator of the quote (EUR/AUD, GBP/JPY, EUR/GBP), price per 1 point will be calculated by a slightly different formula.
Exchange rate of quote currency to USD: (USD/CAD) = 1.27329
Point value for 1 lot of gbp/cad: (0,00001 / 1.27329) * 1 * 100,000 = 0.79 USD
Exchange rate of quote currency to USD: (USD/AUD) - it will be opposite price of AUD/USD = 1/0.75383 = 1.326
Point value for 1 lot of eur/aud: (0,00001 / 1.326) * 1 * 100,000 = 0.75 USD
Forex Trading or commonly known as the foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world.
Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed with the advent of dedicated electronic trading platforms and the internet, which allows individuals to access the global currency markets. In 2016, it was reported that retail foreign exchange trading represented 5.5% of the whole foreign exchange market ($282 billion in daily trading turnover).
Prior to the development of forex trading platforms in the late 90s, forex trading was restricted to large financial institutions. It was the development of the internet, trading software, and forex brokers allowing trading on margin, that started the growth of retail trading. Today, traders are able to trade spot currencies with market makers on margin. This means they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds.
Client are able to receive access to real-time pricing of the forex market and is quoted buy and sell prices for a number of instruments via our online platform. The client has the freedom to decide at which price they decide to buy or sell, and vice versa, and can execute a transaction at any time they wish when the market is open. They are able to manage their trades as efficiently as they wish