Selling the EUR/USD
Trade forex commission-free. You can open a new position from just 0.5%* of the contract value.
Depending on conditions in the underlying market, our forex trading spread can be as low as 0.8 pips on fx pairs such as AUD/USD, EUR/USD and USD/JPY, and from just 1 pip on GBP/USD and EUR/GBP. All our contract sizes are set out in the Contract Details.
Opening the forex position
As an example, you decide to open a short trade on the Euro against the US dollar. In September 2011 our quote is 1.38661/1.38669, and you sell 5 contracts (the equivalent of E500,000) at 1.38661.
The value of your position is E500,000 x 1.38661 = US$693,305. To open the position you supply a deposit of just 0.5% of the position. Your deposit is therefore 0.5% x US$693,305 = US$3,46653. There is no commission to pay on FX trades.
Interest adjustments
While the position remains open, your account is debited or credited to the current Tom-Next rate. Tom/Next expresses in pips the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency that is being notionally bought overnight. An administrative charge not exceeding 0.3% per annum applies on either side of the current Tom/Next spread. This maximum charge will apply to both regular and mini-contracts.
Closing the fx position
One week later, EUR/USD has fallen to 1.33113/1.33121, and you take your profit by buying 5 contracts at 1.33121. Your gross profit on the trade is calculated as follows:
Profit
| Closing transaction | E500,000 (5 contracts) x 1.33121 = US$665,605 |
| Opening transaction | E500,000 (5 contracts) x 1.38661 = US$693,305 |
Gross profit: US$27,700
To calculate the net result you also have to include interest adjustments. For more information see Contract Details.
* Applies to Trader Accounts
Buying the AUD/USD
Trade all our forex contracts commission-free. You can open a new position from just 0.5%* of the contract value.
Depending on conditions in the underlying market, our forex spread can be as low as 0.8 pips on currency pairs such as AUD/USD, EUR/USD and USD/JPY, and from just 1 pip on GBP/USD and EUR/GBP. All our contract sizes are set out in the Contract Details.
Opening the fx position
For example, you decide to trade long on the Australian dollar against the US dollar. Our quote in December 2011 is 0.99728/0.99836, and you buy 5 contracts (the equivalent of A$500,000) at 0.99836. The value of your forex position is A$500,000 x 0.99836= US$499,180. To open the position you supply a deposit of just 0.5% of the position. Your deposit is therefore 0.5% x US$499,180 = US$2,459.90. There is no commission to pay on forex trades.
Interest adjustments
While the position remains open, your account is debited or credited to the current Tom-Next rate. Tom/Next expresses in pips the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency that is being notionally bought overnight. An administrative charge not exceeding 0.3% per annum applies on either side of the current Tom/Next spread. This maximum charge will apply to both regular and mini-contracts.
Closing the forex position
Two days later, AUD/USD has risen to 1.01041/1.01049, and you take your profit by selling 5 contracts at 1.01041. Your gross profit on the trade is calculated as follows:
Profit
| Closing transaction | A$500,000 (5 contracts) 1.01041 = US$505,205 |
| Opening transaction | A$500,000 (5 contracts) x 0.99836 = US$499,180 |
Gross profit: US$6,025
To calculate the net result you also have to include interest adjustments. For more information see Contract Details.
* Applies to Trader Accounts