The Forex (FX) market is considered to be the largest financial market in the world. MBG Markets provides traders with access to FX products. The transaction price is quoted based on the price of the underlying Forex. Traders in the market include banks, corporations, financial institutions, and retail investors. The FX market is also the most liquid market in the world. The average daily turnover in the FX market is US$5.1 trillions (based on the volume in April, 2016, provided by the Bank for International Settlements), and it is continuously growing. It is larger than the combination of stock and futures markets. Market liquidity is rapid so that investors can buy or sell currency immediately without delay.
Example 1-Buying 1 lot of EURUSD contract (which has a contract size of 100,000) in view that EUR will appreciate against USD.
|Buy/Long1 lot of EURUSD contract at the ask price 1.13330||1 x 100,000 x 1.13330 = USD113,330 (contract value denominated in the Right-Hand-Side (RHS) currency)|
|The leverage level set on your account is 100:1. It requires an Initial Margin to be deposited into your account, which is 1% of the contract value||USD113,330 x 0.01 = USD1,133.30 (Initial Margin) Subject to underlying price movement|
|Closing 1 lot of EURUSD contract (Sell/Short) at the bid price 1.13830||(1.13830 - 1.13330) x 1 x 100,000 = USD500.00 profit|
Example 2-Selling 1 lot of EURUSD contract (which has a contract size of 100,000) in view that EUR will depreciate against USD.
|Sell/Short 1 lot of EURUSD contract at the bid price 1.13450||1 x 100,000 x 1.13450 = USD113,450 (contract value denominated in the Right-Hand-Side (RHS) currency)|
|The leverage level set on your account is 100:1. It requires an Initial Margin to be deposited into your account, which is 1% of the contract value||USD113,450 x 0.01= USD1,134.50(Initial Margin) Subject to underlying price movement|
|Closing 1 lot of EURUSD contract (Buy/Long) at the ask price 1.13850||(1.13850 - 1.13450) x 1 x 100,000 = USD400.00 loss|