FAQ about FOREX market & CFD

What is your working schedule?

You are able to trade on Forex market for 5 days a week starting from Sunday 23:00 GMT and ending Friday 21:00 GMT. Though, CFDs trading on stock markets is allowed strictly during the hours of trading for the specific instrument. You can check more information on "Contract Details" page. You are also able to contact our operators in order to consult them about any problems concerning your Internet connection. Our technical support works 24 hours a day, constantly ready to answer any of your questions.

I am a Forex trader. What happens with my position overnight?

With the help of swaps we roll over all open positions overnight. Depending on the distinction between rates of interest and swap rates of the broker’s counteragent, they can be both positive and negative.

For example, let’s decide that rate in Europe is 4,25% and in America – 3,5%. Then, let’s assume that one has an open position and intends to sell EUR/USD. To do that he has to sell 100 000 Euro – this means he has to borrow them at the rate of 4,25%. By selling Euro one purchases American dollars and deposits them at the rate of 3,5%. In all his transaction fees: (4,25 - 3,5)% annual or, which is the same at the rate EUR/USD 0,9000: $675 a year or $1,85 a day.

As you see, they will have to write off of him $1,85 each day from one position of the lot to sell on EUR/USD. Though, if one has a position that he wants to buy then, using the same analogy, he will be added $1,85 every day. In actual life a little more than said $1,85 is written off and a little less than the same $1,85 is added. This “little” part the broker takes for the transfer of your position to the next day.

You are able to find the table that has all the swap rates here. Debited and credited amount is named storage.

Please note that the storage in the period from Wednesday till Thursday is usually three times higher due to the fact that Friday is the value date for all the positions that were opened on Wednesday. When these positions are rolled over the value date is automatically transferred to Monday.

I trade CFD on US stock market and US index shares. What is going to happen to my position overnight?

It is possible to say that are the contracts for difference are qualified as shares process on the credit proceeds. In case you trade CFD you are able to receive all the benefits of underlining share (even dividends and price rise) and they return all on-credit expenditures to the seller. It reminds of a bank credit as you borrow some money in order to purchase shares and receive all shareholders’ benefits and bank itself takes an interest. CFD describes this agreement as a single deal.

Buying CFD on Us Stocks or index shares:

If you want to keep your position open until the very end of the trading session, you will require credit settlements. For US Stock markets they are calculated with regard to FED funds rate and the price of a certain share by the end of the day. When we take FED Funds rate of 1.75% as the example and also add the closing price of the Microsoft share that is, for example 25.00, you can have your credit settlements calculated the following way:

N_Stocks x P_Close x Interest / N_Days =
= 100 x $25.00 x (1.75% + 1.25%) / 360 =
= $0.28

Selling CFD on Us Stocks or index shares:

In case your position remains open at the end of the trading session you receive credit that depends on the rate of the FED Funds (for American stocks) and the closing price of the sold shares. Let’s say that, for example, funds rate of FED is 1.75% and the AXP shares closing price is 33.10. Then, your credit is calculated the following way:

N_Stocks x P_Close x Interest / N_Days =
= 200 x $33.10 x (1.75% - 1.25%) / 360 =
= $0.09

Note: from the beginning of the Friday and until Monday storage roll overs of CFD position are three times higher than on other days due to the fact that the position is leveraged for 3 days instead 1. You can check current CFD swaps here

I trade CFD on commodities futures and stock index futures. What happens with my position overnight?

There is no storage available to roll over a CFD position on mentioned futures.

I want to find out the information about the size of 1.0 lot, commission, margin requirements, spreads etc., please.

All the details can be found here: "Contract Details"

How am I able to find out the profit trading on Forex?

Let’s assume that you decide to open a long position at USD/JPY for 2.0 lot at 117.89. Then you close this position at 118.40. How to calculate the profit you receive?
When you opened this position, you purchased 200,000 USD and sold 117.89 * 200,000 = 23,578,000 JPY.
When you closed this position, you gave away 200,000 USD and purchased 118.40 * 200,000 = 23,680,000 JPY.
Dollars are mutually canceled; you have +102,000 JPY, or at the close level +861.49 USD. This will be your final profit from the trading.

How much does one pip values?

The value of one pip on FOREX on GBP/CHF can be calculated the following way. For example, we purchase 1 lot at 2.3300 and sell at 2.3301. At the opening of the position we purchase 100,000 GBP and give away 2.3300 * 100,000 = 233,000 CHF. At the closing of the position we give away 100,000 GBP and purchase 2.3301 * 100,000 = 233,010 CHF. GBP are mutually cancelled and Swiss franks are remained +10 CHF, which is +10 / (the rate of USD/CHF) = +10 / 1.6010 = 6.25 USD. As you see, by earning 1 pip on 1 lot on FOREX on GBP/CHF we are able to receive $6,25 profit. This is what we call the value of 1 pip on GBP/CHF. The pip value is calculated the same way for other currencies.

Can I use leverage less than allowed average size, 1:33 for example?

The maximum leverage is 1:100. You have the right to apply to your broker if you decide to change it for some reason. But can this be really reasonable. For example, let’s assume that you have $10 000.

• your leverage is 1:100, and you decide to enter the financial market with 1.0 lot. Margin requires you to have $1 000 (10% of the deposit). And so the Stop Out will occur if your losses reach over $9 700 (over 970 pips for EUR/USD pair).
• your leverage is 1:33, and you decide to enter the financial market with 1.0 lot. Margin requires you to have $3 000 (33% of the deposit). And so the Stop Out will occur if your losses reach over $9 100(over 910 pips for EUR/USD pair).

Note: Stop Out takes place if your equity (including profit or losses on open position plus the balance of your account) drops below 30% of necessary margin. When this happens, the broker has the right to close all of your positions or a certain number of them.

So, lesser leverage means higher margin requirements and brings you almost no advantages. If you want to minimize your risks, it is highly recommended to you to follow the Money Management rules instead of relying on leverage.

Do I have sort of limited number of transaction that I need to make per month?

Your broker doesn’t have any limits for your transactions number. You just have to follow your personal trading strategy.

I need to find out more information about how to open a live account to trade on Forex and CFDs.

All the details of opening live account procedure can be found here: "Open a live account".

Why did a broker decided to suddenly close my loss position without my consent?

Broker is allowed to close one or all you loss position at the prices they are currently trading at when your equity (including profit or losses on open position plus the balance of your account) drops below 30% of the Margin. This procedure is named stop out or over-loss.

For example, B – your personal account balance, M - margin used for open positions, L - losses for your open positions, then over-loss procedure takes place when L - ( B - M ) > 70% x M, or B - L < 30% x M.