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Foreign-exchange Introduction

       Foreign-exchange is considered to be the most active and most mobile financial product in the world. The volume of global foreign-exchange transactions is estimated to exceed $4 trillion per day. Spot forex trading is a product that is traded through a financial institution and is different from trading through an exchange because there is no place for actual goods exchange and no central exchange. There is no limit to the trading hours of foreign exchange when the market operates from Monday to Friday, and the exchange rate between major currencies is constantly updated. Such high liquidity and frequent fluctuations in prices have caused foreign-exchange investment to attract a large number of experienced investors.

Why invest in foreign-exchange?

High Liquidity

With more than $4 trillion in daily trading volume and the participation of millions of investors in the foreign exchange market, there is always a chance to enter and exit the market at a fairly transparent price.

Predictable Market

The trend in the foreign-exchange market is repetitive and regular. This allows market participants to increase the price expectations after effectively using the auxiliary analysis tools.

24-hour T+0 Transaction

The foreign-exchange market is a 24-hour continuous global market, starting from the opening of Wellington, New Zealand on Monday, until the end of the US market on Friday.

Two-way Transaction

Because the foreign-exchange market is constantly changing, there is always an opportunity to trade, to choose a currency to depreciate or appreciate relative to another currency. Therefore, investors can profit by doing long or short selling strategies.

Transaction details

MarginThe margin requirement is 1%, which is 1:100 leverage. Trading time:(GMT-5) Sunday 17:00 to Friday 16:55

Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference
EUR/USD 100000 0.01 100 2 GBP/AUD 100000 0.01 100 8
GBP/USD 100000 0.01 100 2 GBP/CAD 100000 0.01 100 12
USD/CAD 100000 0.01 100 4 GBP/CHF 100000 0.01 100 12
USD/JPY 100000 0.01 100 2 GBP/JPY 100000 0.01 100 10
AUD/USD 100000 0.01 100 2 GBP/NZD 100000 0.01 100 4
NZD/USD 100000 0.01 100 4 GBP/SGD 100000 0.01 100 45
USD/CHF 100000 0.01 100 3 CHF/JPY 100000 0.01 100 10
AUD/CHF 100000 0.01 100 6 NZD/CAD 100000 0.01 100 12
EUR/AUD 100000 0.01 100 9 NZD/CHF 100000 0.01 100 12
EUR/CAD 100000 0.01 100 9 NZD/JPY 100000 0.01 100 8
EUR/CHF 100000 0.01 100 5 CAD/CHF 100000 0.01 100 8
EUR/GBP 100000 0.01 100 2 AUD/JPY 100000 0.01 100 6
EUR/JPY 100000 0.01 100 4 CAD/JPY 100000 0.01 100 8
EUR/NZD 100000 0.01 100 12 AUD/CAD 100000 0.01 100 7
AUD/NZD 100000 0.01 100 8

MarginThe margin requirement is 2%, which is 1:50 leverage.

Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference
AUD/SGD 100000 0.01 100 45 NOK/SEK 100000 0.01 100 56
CHF/SGD 100000 0.01 100 45 SEK/JPY 100000 0.01 100 42
SGD/JPY 100000 0.01 100 42 USD/CNH 100000 0.01 100 50
EUR/PLN 100000 0.01 100 125 USD/HKD 100000 0.01 100 40
EUR/SEK 100000 0.01 100 125 USD/NOK 100000 0.01 100 120
EUR/SGD 100000 0.01 100 50 USD/PLN 100000 0.01 100 571
EUR/ZAR 100000 0.01 100 5 USD/SEK 100000 0.01 100 5
GBP/NOK 100000 0.01 100 5 USD/SGD 100000 0.01 100 5
GBP/SEK 100000 0.01 100 5 USD/ZAR 100000 0.01 100 5
NOK/JPY 100000 0.01 100 5 ZAR/JPY 100000 0.01 100 5
EUR/NOK 100000 0.01 100 125

Not-tradeableOffer quotes only, not-tradeable.

Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference Instrument Contract size (1 lot) Minimum trading unit (lot) Maximum trading unit (lot) Floating average point difference
EUR/DKK 100000 0.01 100 – GBP/TRY 100000 0.01 100 –
EUR/HKD 100000 0.01 100 – USD/DKK 100000 0.01 100 –
EUR/HUF 100000 0.01 100 – USD/HUF 100000 0.01 100 –
EUR/TRY 100000 0.01 100 – USD/RUB 100000 0.01 100 –
GBP/DKK 100000 0.01 100 – USD/THB 100000 0.01 100 –
EUR/CNH 100000 0.01 100 – EUR/CZK 100000 0.01 100 –
USD/CZK 100000 0.01 100 – USD/MXN 100000 0.01 100 –
USD/TRY 100000 0.01 100 –

Transaction Example

For example 1Buy 1 lot of EUR/USD (with a contract size of 100,000) to bullish the EUR/USD exchange rate.

Transaction Description Profit/Loss
Buy 1 lot of EUR/USD with a price of 1.13330 1*100,000*1.13330=113,330 USD (Contract Value)
The margin requirement is 1% 113,330*1%=1133.3USD Initial margin (will change due to market price)
The commission is 0.0036% of the contract value (unilateral) 113,330*0.0036%*2=8.16 USD (It is assumed that the closing price is the same as the opening price, so the commission will change due to market price.)
Close 1 lot of EUR/USD (sell), the selling price is 1.13830 (1.13830-1.13330)*1*100,000-8.16 = 491.84USD Profit

For example 2Buy 1 lot of USD/CHF (with a contract size of 100,000) to bullish USD/CHF exchange rate.

Transaction Description Profit/Loss
Buy 1 lot of USD/CHF with a price of 1.01539 1*100,000=100,000USD (Contract Value)
The margin requirement is 1% 100,000*1%=1000 USD Initial margin
The commission is 0.0036% of the contract value (unilateral) 100,000*0.0036%*2=7.2 USD
Close 1 lot of USD/CHF (sell), the selling price is 1.01139 (1.01539-1.01139)*1*100,000-7.2 = 392.8USD Profit