FX Trade

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  1. You think that Sterling is going to appreciate against the US Dollar. You decide to go long at £2 per point when the current price is 2.0137 / 40
  2. The Notional Trading Requirement (NTR) on GBPUSD Cash is 150. Your total margin requirement will be 300 (150 x £2)
  3. You let the position roll over to the next day so you incur a night's financing. FX Financing is calculated differently from Stocks, Indices and Sectors as they are based on the daily interest rate differential between two currencies (known as Tom/Next swap rates). In this example it is 0.09 of a pip for this particular night.
  4. The closing price at the end of the day is 2.0165. The financing applied to this position can be calculated by multiplying your stake in GBP by the tom/next swap points for the instrument held. In this example your stake is £2 x 0.90 points = £1.80 financing cost.
  5. You close your position the next day at 2.0185 having made 45 points (2.0185 - 2.0140). At £2 a point this is a gross profit of £90. Subtract the financing charge of £1.80 gives you a net profit of £88.20.

Please remember that had the market moved against you, you would have made a loss on this trade.

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