Forex Investment and Currency Trading

The forex dealing platform provides sophisticated order entry and tracking. Orders may be entered at any rate - inside or outside the existing spread - using the following orders types:

Limit orders
An order with restrictions on the maximum price to be paid or the minimum price to be received.
If a trader is long USD/CHF is 1.1627, a limit order would be entered to sell dollars above that price, for example, at 1.1800.

Stop Loss orders
Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s position.
If the trader above is long USD at 1.1627, a stop loss order could be left at 1.1549, in case the dollar depreciates below 1.1549.

As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows us to fill client stop orders at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.1549, the trader will be filled when the bid reaches 1.1549 (i.e. the bid/offer is 1.1549/54).

One Cancels Other orders (OCO’s)
A contingent order providing that one part of the order is cancelled if the other part is executed. This is a particularly useful order type in that it allows traders to execute specific trading strategies based on technical analysis - without having to watch the market tick by tick.
As above, with the trader long USD/CHF at 1.1627, a typical OCO order would be a stop loss at 1.1562 and a limit (take profit) at 1.1700. If one part of the order is filled, the other is automatically cancelled.

All of the above orders may be entered as Day Orders, entered today and good until end of NY business day (1700 ET). Or, clients may choose to may enter a Good ’til Cancelled Order (GTC), which is valid until the order is executed or cancelled. Orders remain open until they are triggered or cancelled. If you close out a position manually, you must cancel any order(s) relating to that position.

Order Execution
First In First Out (FIFO)

Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.

Stop Loss Orders - Execution Rules

As a rule, sell stops are filled on our bid, and buy stops are filled on our offer. This allows us to fill client stop orders at the rate they requested in almost every case. In the rare instance that the market gaps over a requested rate, the stop is filled at the best available price. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a stop order is placed to sell USD/CHF at 1.1549, the trader will be filled when the bid reaches 1.1549 (i.e. the bid/offer is 1.1549/54).

Good Til Cancelled (GTC) Orders - Execution Rules

All GTC orders remain open until they are triggered or cancelled. If you close out a position manually, you must cancel any order(s) relating to that position.

Orders left over the weekend

Orders left pending at close of trading on Friday at 1630 ET or placed over the weekend are subject to a gap open on Sunday evening when trading at 1900 ET. For both stop loss and limit orders - if your order is triggered due to news, events or other fundamental factors, it will not be executed over the weekend. Your order WILL be executed at the prevailing price when the trading desk opens Sunday. Because of the additional gap risk involved, you may want to reconsider leaving open orders over the weekend.

Margin

The initial margin requirement is 0.5% for mini accounts and 1% for standard accounts.

If you do not have adequate funds available to enter a new forex position, you will receive an “insufficient margin funds” message when attempting to deal.

If the unrealized P&L of your net total open position falls below your account balance, your trading account is under margined and all your open positions may be liquidated. To avoid liquidation of your positions, do not use your entire account balance as margin for open positions. Instead, leave enough funds in your account to withstand a market movement against your open positions. We suggest you always use stop loss orders to limit your downside risk when trading.

Please contact us if you wish at any time to use a lower degree of leverage or otherwise adjust the margin settings in your forex account.

Rollovers

A rollover is the simultaneous closing of an open position for today’s value date and the opening of the same position for the next day’s value date at a price reflecting the interest rate differential between the two currencies.

All open positions are automatically rolled over to the next day’s value date following the close of NY trading at 1700 ET.

Clients have the opportunity to earn interest on rollovers, depending on the direction of their positions and interest rate differential between the two currencies involved. For example, US interest rates are higher than Japan’s, so if a trader is long USD/JPY (i.e. holding dollars), they will earn interest on the roll. Conversely, if a trader is short USD/JPY (i.e. holding yen) they will pay interest on the rollover.

The spot forex market is traded on a two-day value date. For example, for trades executed on Monday, the value date is Wednesday. However, if a position is opened on Monday and held overnight (remains open after 1700 ET), the value date is now Thursday. The exception is a position opened and held overnight on Wednesday. The normal value date would be Saturday; because banks are closed on Saturday the value date is actually the following Monday. Due to the weekend, positions held overnight on Wednesday incur or earn an extra two days of interest. Trades with a value date that falls on a holiday will also incur or earn additional interest.

Rollover credits or debits are reflected in the unrealized P&L of the open position, and a rollover report (available in the “Reports” tab of the trading platform) provides additional detail of rollover activity.

Confirmations

Deals are confirmed on screen, typically within one second. Full transaction details may be accessed on screen as well, including date, time, rate, notional amount bought and sold, USD value, and reference number.

Daily Housekeeping

Daily Housekeeping will occur each evening at 1700 and will last about 5 minutes. During that time, important system maintenance tasks will be performed and back office staff will conduct daily rolls. Online trading MAY be unavailable, but we will accept phone orders.

Interest

Client funds maintained in a non-segregated account earn interest on deposited funds not used as posted margin. In addition, clients either earn or pay on overnight rollovers, depending on the direction of their positions. Open trades are rolled forward in the base currency of the position.

Reporting

The dealing software tracks all trading activity in real time, allowing clients to view current open positions, real-time profit and loss, margin availability, account balances, and all historical transaction details directly on-screen.