The ECN represents the CFD contract. CFDs have existed for many years in different forms. In short, they are financial instruments that use margin in a transaction to buy or sell financial products (such as stocks or futures) without having to invest in the full value of the product. The stock price difference contract appeared in the 1990s. They are introduced by stock traders, allowing hedge fund clients to use high leverage to get a lot of market downward trends. CFDs also have one advantage: no stamp duty is paid. It was not until the late 1990s that, with the rapid development of technology, CFD became a major concern, making CfD a dominant market over the past decade. With leverage, traders have the opportunity to speculate on highly volatile stocks over a short period of time. CFD is now widely used in many markets, not limited to the stock market. Not only are professional traders available, but they are also available to retail customers at home. Related report Statistics: 25% of the trading volume over UK shares is CFD trading. Now CFDs are in Australia, Canada and Singapore.
Margin trading is a form of forex spot trading. Because the transaction is not delivered, you do not need to convert it to any commodity or stock. Because no liquidation or full transaction is due, margin trading allows customers to use a small amount of money to do a larger number of transactions, and this small amount of money is the margin. As a result of market volatility and the rules of the dealer, the margin may vary for the currency pair you are trading, and if a trader allows high leverage, this may not be in your interest because it can lead to even greater losses when the market is unfavorable to your transaction. If the net value of your trading account is less than 100%, our system will force your position to be flattened out. Although you may not be aware of your account, it is your responsibility to ensure that your account has sufficient margin to maintain your position.
Trading CfD, you only have to put in your account the initial deposit required by the commodity. For example, Vodafone stock, if the margin requirement is 5%, you only need to put in the percentage of the transaction value. Buy value ￡50,000 Vodafone stock, only need to put ￡2,500 in the account (￡50,000 5%). Unlike traditional stock trading, you are not holding a company's stock when dealing with CfD. Profit or loss is determined by the difference between the opening price of an ECN commodity and the price of the peace. You do not have any voting rights when the shareholder Committee resolution. If you hold a short position, you need to pay dividends. If you hold a long position, you will receive a dividend. Because CfD is a financial derivative, it is not bound by any exchange. This means that the price of CFDs we offer is generally based on the prices derived from the various basic markets. At the same time, the price you see is the price you get.
A trading CfD has many advantages, and it generally does not have to pay stamp duty on the stock because you actually did not buy any stock. All renewal contracts will generate overnight interest. If you hold a bullish (for example, the market is going up, you will benefit), because you put a portion of the actual value of the traded goods, in the balance of the account, equivalent to the "effective lending." In this respect, we will be charged with the corresponding currency of the overnight borrowing and lending rates on the basis of a 2% proportion of the financing costs as the overnight interest. If you hold a short (for example, the market falls, you will be profitable, as you have deposited the full value of the goods, so you will be able to obtain a 2% percentage of the financing charge on the basis of the overnight borrowing and lending rate of the corresponding currency as the overnight interest (minimum to 0%), as opposed to other dealers, EMR FX offers very competitive overnight interest. As mentioned before, the profit or loss of any CFD transaction is based on the difference between the open price and the peace position.
Therefore, if you buy Vodafone at the price ￡1.40 and ￡50,000 at ￡1.60, you will earn a 20 penny difference, the actual amount is ￡7,143 (￡50,000/1.40x20p). If the price falls to ￡1.20, you will lose the same amount. To calculate the number of CFD contracts you would like to trade, you need to divide the price of the CFD in the amount you want to trade. For example, ￡50,000/￡1.40=35,714. Please confirm that you have read our risk warnings and understand the risks that margin transactions may pose to you. If the price continues to fluctuate with your transaction, it may result in a loss exceeding your initial investment amount.
Almost every financial commodity has a two-way price. That is, your purchase price and price in a particular market. When trading CfD, the currency you use to trade is generally the base currency of the market, all UK shares are traded in sterling, and American goods are US dollars.
1 points usually refers to the lowest price of the rise and fall. For example, Britain's Vodafone stock, which trades pennies, has a minimum take-off and landing rate of 10 pence. Other countries ' stock quotes, such as France Telecom's price of 16.95, mean 16 euros and 95 cents, 1 cents per point.
It is very necessary to know the point value of a transaction, in general, it is directly related to your profit or loss. In short, the point value represents the value of each point. If you buy a CFD ￡5,000, then you will profit or lose ￡5,000/price (for example 142) =￡35.21, regardless of whether the market is up or down. You can also use the number of CFD contracts you have traded. For example: Buy CFD ￡5,000, you can buy 3521 CfD (￡5,000/￡1.42). The value of the margin per penny is 3,521x 0.01 =￡35.21.
An order is a transaction order in which you set open or close positions. Orders are more useful when you fail to follow market changes. You can open or close your position at the price you specify. The order can be used to control the risk or to lock the profit. Whether the order can be executed, you need to look at the same type of order which first arrives. If you set a stop or stop for your position, please note that we are not guaranteed to deal at the set price because the market may appear to be empty.
Stop-loss is a closed-position instruction set at a worse price relative to the current market. But a stop-loss directive is a closed position that is set at a lower price relative to the current market, so it is limited to the open position.
A limit is a flat order that is set at a better price relative to the current exchange rate. But limit orders can be used to open or close positions.
If you plan to sell the value ￡5,000 Vodaphone (3,700 CFDs) when the price falls to 135. If the market falls to 135, a new position will be created, which can be achieved by setting a stop order. If you do not set a pending entry deadline, the pending orders are triggered or manually canceled.
For example: You sell 3,700 Vodafone with ￡1.30, then the price rises and the position loses money. If you limit your potential losses to 35 points, that is (￡1.30￡0.35) =￡1.65. If the price reaches execution, you will lose ￡1,295 (3,700 x￡0.35). If the offer we offered at that time has reached 165, the system will help you to liquidate your position.
Your Excellency sells 3,700vadafone in ￡1.41. Set to stop the surplus in 1.30. If the profit price is triggered, you will profit ￡407 (3,700 x￡0.11).
You can set up an order on the platform, but you also need to set the order type, transaction size, price, and due date.
In a situation where the market is very volatile, the order may be triggered at the price you set, but at a worse price, this is known as a skip. In this case, the EMR FX will first offer the customer the most advantageous price for the transaction.
In the MT4, first select the list that needs to be closed, then right-click-select "Close Position", then click the "Close Position" button. If you simply do the same amount of reverse trading, you cannot close the position, but will allow you to hold both bulls and bears.
As mentioned previously, if you hold a position more than 9 o'clock in the morning (New Zealand time), you will receive or pay interest. No interest will be generated if you do not have a position at 9 o'clock in the morning (New Zealand time) the following day. If you hold a long because you are part of the actual value of the traded goods, in the balance of the account, it is equivalent to "effective borrowing". In this respect, we will charge a 2% financing fee for the overnight interest on the basis of the overnight borrowing and lending rate of the corresponding currency. If you hold a short, equivalent to the full value of the goods you have deposited, you will receive the overnight lending rate minus 2% of the financing charge as the overnight interest (minimum to 0%). If you hold both long and short, then they will not cancel each other out, but charge interest and interest, and the interest rate is at your own risk. Foreign exchange interest is totally different.