Spreads and Margins
Dealing Hours
The dealing desk is open 24-hours a day from Sunday 2 PM New York time until Friday 4:00 PM New York time. Quotations, order placement, and confirmation is available online.
Dealing Spreads
FX Trading offers 18 currency pairs with FIXED spreads in ALL market conditions regardless of trade size. To see FX Trading fixed spreads as a table in a new window, click here.
Trade Size
On the FX Trading platform all trades are executed at $100,000 per standard one lot or $10,000 per mini one lot.
Here are some examples:
- U.S. Dollar/Japanese Yen (100,000 U.S. Dollars)
- Euro/U.S. Dollar (100,000 Euros)
- Euro/Great Britain Pound (100,000 Euros)
- Euro/Japanese Yen (100,000 Euros)
Margin
Fx Trading enables currency trading to be conducted on a highly leveraged basis. Every trader is able to select the degree of leverage or gearing that the trader wishes to employ in trading. Unless the trader specifies otherwise, Fx Trading sets the leverage level at Fx Trading\'s default margin level for the deposited amount. Fx Trading\'s default margin level is 400:1. To see FX Trading margins as a table in a new window, click here.
Up to 400:1 Leverage
Clients must have $250 of equity to open each subsequent standard lot ($100,000). This amount does not change after 5:00 PM New York time, which is the rollover cut off, but stays constant.
Negative Balance Protection
There is also an important safety feature imbedded in this system that prevents clients from losing more money than they have in the account. Should the account equity -- meaning the total floating value of the account -- fall below either $500 for standard accounts or $50 for mini accounts, the dealing desk will close all positions. This protects the trader from losing more than the funds deposited into the trading account.
Rollover/Interest Policy
At 5:00 PM New York Time, funds are subtracted or added to accounts with open positions because of the automatic rollover. Funds are added to the account for positions in which the client is long (holding) the currency bearing the higher interest rate. Funds are deducted in the opposite circumstance. This rollover/premium policy is one of the most generous policies available to traders in the forex industry, as many firms will not pay premium on 400:1 leverage.
On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usualamount.This "3-Day" rollover accounts for settlement of trades through the weekend period.
Why does Rollover take place?
In the spot forex market, trades must be settled in two business days. If a trader sells 100,000 euros on Tuesday, the trader must deliver 100,000 euros on Thursday, unless the position is rolled over. As a service to our traders, Fx Trading automatically rolls over all open positions to the next settlement date at 5:00 PM New York time. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The amount of the difference varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.
Types of Orders
The trading platform provides sophisticated order entry and tracking of market orders, entry orders, stop/limit entry orders, and stop-loss orders. All of the above orders are Good Until Cancelled (GTC), which is valid until the order is executed or cancelled.
Deposit Options
Currently, Fx Trading only accepts account deposits via bank wire, personal check, or certified check. Online account deposits via e-check and credit card will be available shortly.
Margin: Managing your Risk in the FX Market
By trading on margin, traders have the ability control positions much larger than there deposit. The margin deposit for leverage is not a down payment on a purchase of equity, as many perceive margins to be in the stock markets. Rather, the margin is a performance bond, or good faith deposit, to ensure against trading losses. This is very useful to short-term day traders who need the enhancement in capital to generate quick returns. However, leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains. To help manage your risk, Fx Trading offers a unique margin watcher feature, which is embedded in the platform. If the equity in your account drops below the required level to maintain your open positions, the dealing desk will close all open positions. This limits risk. You also have the ability to track your margin in real time. In the accounts window you will see two columns: used margin and usable margin. The used margin indicates funds currently pledged towards open positions. You can think of usable margin as your "wiggle" room. Once usable margin reaches zero, you will be unable to open any new positions.
To learn more about the margin watcher feature please contact the FX TRADING staff,which is available 24-hours a day, 7 days a week to walk you through the FX Trading Station.
FREE $50,000 Spot Demo Acct
