Foreign Exchange Helpdesk
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Trading
How do I check my positions?
The most efficient way to monitor your account is using the Client Position Keeping window within
Marketmaker®. This enables you to monitor your trading positions, your daily
profit and loss and also your cash positions. It is updated in real-time with live market prices. To access this function
of the software, click on 'Trading' from the top menu and select 'Client Position Keeping'
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How do I calculate Margin Requirements?
Initial margin requirements for Spot FX positions are 1% of the total position value.
How are rollovers calculated?
0.5% of Primary currency + 0.5% of secondary currency. You are long 100,000 USD/CHF at 1.2688 Your USD margin is 100,000 x 0.005 = 500 USD Your CHF margin is 100,000 x 1.2668 x 0.005 = 633.40 CHF Your total margin requirement expressed in USD is 500 + (633.40 / 1.2668) = USD 1000 You will need to have ledger balances in both the primary and secondary currencies to the value of that currency's margin requirement to avoid being charged interest. [ Close ]
All open positions are rolled over based on the daily interest rate differential between the two currencies. Rollover rates
can vary on a day-to-day basis depending on the changes in daily interest rates.
How are interest payments calculated and when are they made?
A rollover is the exchange of one currency for another, on one day, matched by a reverse exchange on the next settlement day. The two deals are made at the same time. The basis of a rollover is to move a given currency deal forward in time, based on the interest rate differential between the two currencies. This mechanism will continuously roll forward any open position, as long as you have sufficient margin for your trading, until you decide to close this position. Example On Monday you bought 500,000 USD/JPY at the rate of 140.50, value Wednesday as a spot transaction. You decide to keep your position open after 10.00pm so we automatically roll your position to the next value date, Thursday. The following deals will be transacted on your account (assuming USD/JPY rate is now 141.00):- You sell 500,000 USD/JPY value Wednesday at 141.02 You buy 500,000 USD/JPY value Thursday at 141.00 Your position has been rolled forward to the next value date, Thursday. The net result of the rollover transaction was to credit your account of 2 pips or USD 70.92 which represents the interest rate differential gain for one day, value Wednesday to value Thursday. In this example Japanese Yen was at a premium to the US Dollar as Japanese Yen rates were lower than US Dollar interest rates. Because you were short Japanese Yen and long US Dollars you gained the interest rate differential. If you had the opposite position, where you sold 500,000 USD/JPY, being long Japanese Yen and short US Dollars, then you would lose the interest rate differential and your account would be debited. [ Close ]
Deposit Interest is paid on free equity balances over 15,000 USD (or currency equivalent). It is paid at the
relevant currency's applicable Base Rate less 2%. Deficit ledger balances are charged at relevant currency's
applicable Base Rate plus 2%.
Margin Calls and Liquidations explained.
All amounts are calculated daily and applied to your account once a month. [ Close ]
Margin is the deposit required to maintain or open a position. At the time of each trade, the client will require
funds on the account at least equivalent to the total margin requirement. It is therefore the clients
responsibility from the time of the transaction and throughout the term of the position to maintain funds on the
account at least equivalent to the total margin requirement. If market movements cause a situation to occur whereby
there are insufficient funds on your account to cover your margin requirement then CMC Markets will endeavour to send you
margin call emails. However the responsibility ultimately rests with the client and if further market movements
occur and you are significantly overtrading CMC Markets reserve the right to close out (Liquidate) your position(s). If
this occurs you will be sent an email Liquidation Notice informing you of what has happened and the resultant
status of your account.
To hold any positions on your account you require a minimum balance of US $200 (or currency equivalent). This is regardless of margin requirements of any positions. If your account balance falls below this threshold then CMC Markets reserve the right to close all positions on your account. If the level is reached without being on margin call then no margin call email will be sent. [ Close ] |
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