Forex Examples
Trade all our forex contracts commission-free. You can open a new position with a deposit of just 0.5% of the contract value.
The only charge is our dealing spread: for most major FX pairs this starts from just 1 or 2 pips for a full or mini contract. All our contract sizes are set out in the contract details.
Selling EUR/USD
Opening the position
You decide to go short of the euro against the US dollar. Our quote is 1.4470-1.4471 and you sell two mini contracts (the equivalent of €20,000) at 1.4470.
The value of your position is €20,000 x 1.4470 = $28,940. To open the position you supply a deposit of just 0.5% of the notional amount.
Your deposit is therefore 0.5% x $28,940 = $144.70. Please be aware, however, that CFDs are a leveraged product and that it is possible to lose more than your initial deposit.
Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that 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 of no more than 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 position
Nearly two weeks later, EUR/USD has fallen to 1.3976-1.3977, and you take your profit by buying two mini contracts at 1.3977. Your profit on the trade is calculated as follows:
| Profit on trade | ||
|---|---|---|
| Opening transaction: €20,000 (2 mini contracts) x 1.4470 | = | $28,940 |
| Closing transaction: €20,000 (2 mini contracts) x 1.3977 | = | $27,954 |
| Profit on trade: $986 | ||
To calculate the overall profit and loss, you also have to include the accumulated daily interest rate adjustments.
Buying EUR/USD
Opening the position
You decide to go long of the euro against the US dollar. Our quote is 1.4470-1.4471, and you buy two mini contracts (the equivalent of €20,000) at 1.4471.
The value of your position is €20,000 x 1.4471 = $28,942. To open the position you supply a deposit of just 0.5% of the notional amount.
Your deposit is therefore 0.5% x $28,942 = $144.71. Please be aware, however, that CFDs are a leveraged product and that it is possible to lose more than your initial deposit.
Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that 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 of no more than 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 position
Against your expectations, EUR/USD later falls to 1.3976-1.3977, and you decide to cut your losses by selling two mini contracts at 1.3976. Your loss on the trade is calculated as follows:
| Loss on trade | ||
|---|---|---|
| Opening transaction: €20,000 (2 mini contracts) x 1.4471 | = | $28,942 |
| Closing transaction: €20,000 (2 mini contracts) x 1.3976 | = | $27,952 |
| Loss on trade: $990 | ||
To calculate the overall profit and loss, you also have to include the accumulated daily interest rate adjustments.
The Right Choice
- 7000 share CFDs and over 60 forex pairs
- 99.5% of trades executed in 0.1 seconds
- Spreads from just 0.8 pips on forex and 1 point on indices
