Trade all our FX contracts commission-free. You can open a new position from just 1%* of the contract value.
Depending on conditions in the underlying market, our forex spread can be as low as 1 pip on currency pairs such as AUD/USD, EUR/USD and USD/JPY. Spreads start from 2 pips on GBP/USD and many other major currencies. All our contract sizes are set out in the Dealing spreads.
Opening the forex position
You decide to go short on the Euro against the US dollar. On 2 June 2009, our quote is 1.4222/1.4223, and you sell 5 contracts (the equivalent of E500,000) at 1.4222.
The value of your position is E500,000 x 1.4222 = US$711,100. To open the position you supply a deposit of just 1% of the position. Your deposit is therefore 1% x US$711,100 = US$7,111. 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 forex position
On 8 June 2009, EUR/USD has fallen to 1.3811/1.3812, and you take your profit by buying 5 contracts at 1.3812. Your gross profit on the trade is calculated as follows:
Profit
| Closing transaction | E500,000 (5 contracts) x 1.3812 = US$690,600 |
| Opening transaction | E500,000 (5 contracts) x 1.4222 = US$711,100 |
Gross profit: US$20,500
To calculate the net result you also have to include interest adjustments. For more information see Contract Details.
* Applies to Trader Accounts