FX Trading24 - Spreads and Margins

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Spreads and Margins

The Advantage of Trading with FXCM Order Execution

FXCM order execution gives traders the opportunity to trade using price quotations offered by 17 of the world’s largest banks. FXCM offers a highly transparent and intelligent order execution system. Every transaction is carried out with one of the world‘s largest banks or financial institutions, which compete against one another to supply FXCM with the best available bid/ask spreads. FXCM order execution offers traders the advantages that come with trading at highly transparent and competitive prices, and the well-known speed and convenience of FXCM’s award-winning trading platform.

FXCM order execution is available at any time, even during sensational, market-moving news and economic events. Traders can also place entry orders at any price, even within the spread.

Unlike its competitors, FXCM offers customer support and service 24 hours a day. That allows traders to place orders over the phone whenever the market is open. FXCM’s more than 600 highly qualified employees are available around the clock in international main branches and their affiliated companies in New York, London, Hong Kong, and Tokyo to offer you competent service any time, day or night.

Hedging

The FXCM trading platform makes it possible to hedge. Short and long positions can be held simultaneously in the same currency pair:

Buy and sell the same currency pair simultaneously.

Trade in both directions within trend channels, trading ranges, etc. without committing to a specific market direction.

Hedged transactions do not have any margin restrictions.

The hedging feature is very popular. FXCM trading accounts come equipped with the hedging feature. It is available as an option.

Trading Hours

Trade on the forex market opens every week on Sunday between 5:00 and 5:15 PM EST (New York Time) and is open continuously until the following Friday at 5:00 PM EST. Pricing, order placement and confirmation are done both online and by phone. Trading is closed for the weekend.

Trading Etiquette

To place a trade or an order via the phone:

Trader: When calling the trading desk, the trader should specify at the outset the type of account they are trading with.
FXCM: “May I have your account number, please?”
Trader: “My account number is 55555.”
FXCM: “May I have your login ID, please?”
Trader: “My login ID is 55555.”
FXCM: “May I have the answer to your security question, please?”
Trader: “The answer to my security question is Sun Street.”
FXCM: “May I have the name on this account, please?” (The Trading Desk Agent asks this question in order to verify that the caller is indeed the account holder.) "Which trade would you like to make?"
Trader: “I would like to go long at market, 3 lots of USD/JPY."
FXCM: “Filled at 106.65.”

FXCM Active Trader Trading Platform

With the FXCM Active Trader Account, the trader receives real-time exchange rates and charts for the most traded currency pairs. Market depths and even quicker order executions are key features for the FXCM Active Trader Trading Account. FXCM offers traders with the Active Trader Account conditions similar to those in interbank trading. That gives FXCM traders an even greater advantage.

FXCM order execution (no dealing desk, no market maker)
Lower transaction costs
Tighter spreads: e.g. EUR/USD 0.7 pips or GBP/USD 1.8 pips
Volume-based commissions
Access to greater market depth: up to 10 levels
Web-based trading platform - no trading software required
Traders with an FXCM Active Trader Account receive all Gold Services included

The FXCM Active Trader Account is available to traders with a monthly trading volume of greater than 10 million or whose account balance is higher than USD 25,000.

The Active Trader Account is also available via MetaTrader: The conditions of the FXCM Active Trader Account are also available with the MetaTrader Trading Platform. Since the MetaTrader Trading Platform doesn't offer access to the market depth, this feature is only supported over the Active Trader Trading Platform.

Free Demo Account - Active Trader Account

Try the FXCM Active Trader Trading Account free of charge and without obligation with a Demo Account. » Open an FXCM Active Trader Demo Account

Bid/Ask-Spreads

The FXCM Active Trader Account offers traders lower transaction costs, which together with tighter spreads result in lower commissions. Below is a extract of some typical average spreads in the currency pairs available on the FXCM Active Trader Trading Platform. These spreads are displayed in pips. In addition, you can see the spreads for every currency pair in the demo account and test your first trades with no obligation. » Open an FXCM Active Trader Demo Account

Bid/Ask-Spreads - Examples:

Currency pair	Generally available

EUR/USD Euro – U.S. Dollar	0.7 pips

GBP/USD British Pound – U.S. Dollar	1.8 pips

USD/JPY U.S. Dollar – Japanese Yen	1.2 pips

USD/CHF U.S. Dollar – Swiss Franc	1.8 pips

Scaled conditions:

Monthly trading volume	Commission

<100 million	USD 5.00 per 100K/trade

100-200 million	USD 3.50 per 100K/trade

>200 million	USD 2.00 per 100K/trade

Depending on the trading volume the commission is lowered. All you have to do in order to access this commission scaling, which is exclusively available at FX Trading24, is to send an email to info(at)fxcm.co.uk.

Saved costs - Example 100K Trade (Monthly Volume <100 Million):

	FX Trading Station	Active Trader Platform

EUR/USD Spread	2.6 pips= $26	0.7 pips= $7

Commission	$0	$5 X 2 ($5 per side) = $10

Transactions costs	$26	$17


Saved Costs - Example 100K Trade (Monthly Volume >200 Million):

	FX Trading Station	Active Trader Platform

EUR/USD Spread	2.6 pips= $26	0.7 pips= $7

Commission	$0	$2 X 2 ($2 per side) = $4

Transactions costs	$26	$11

Order Volume

With the FXCM Active Trader Trading Platform all trades are placed in standard volumes of 10,000 (10K) units of the base currency per lot. The FXCM Active Trader Trading Platform permits a maximum trading volume of up to 50 million per transaction. To increase trading volume, you can place additional orders.

Here are a few examples:

U.S. Dollar/Japanese Yen (10,000 U.S. dollars)
Euro/U.S. Dollar (10,000 euros)
Euro/British Pound Sterling (10,000 euros)
Euro/Japanese Yen (10,000 euros)

Margin

FXCM allows for currency trading with a number of different margin settings, which offer a high degree of leverage*. Thus traders have the option of adjusting their margin requirements from 3% (33:1) to a maximum of 0.5% (200:1). The margin is simply set aside for the duration of individual trades, and the default setting for new accounts is approximately 0.5% of the trading volume.

In order to trade with the Active Trader Account with 10,000 units of the base currency per lot, you don't need the 10,000 units in your account, just the margin requirement. The margin requirement varies between individual currency pairs and account denominations and may change slightly from time to time.

The margin requirements of all currency pairs can be viewed in the Active Trader Trading Platform. The Dealing Rates window (Advanced Dealing Rates, Sub-Button: Symbols Info) lists the current margin requirements for each currency pair in the MMR column.

*Without proper risk management this high leverage can lead to both positive and negative results.

Rollover/Interest Policy

Open positions still on the market as of 5:00 PM EST (23:00 Central European Time) have a daily rollover interest rate, which a trader is either paid or charged depending on the type of open position.

If you want to receive interest on open positions, all you have to do is hold a positive rollover position at exactly 5:00 PM EST. A positive rollover position is an open position in which the currency pair earns interest due to the current interest rate status. On the other hand, if a trader has an open position with a currency pair that generates negative interest due to the current interest rate status, the trader will have a negative rollover position and the trader will have to pay interest.

The rollover interest rate per lot of trade volume is displayed above the buy or sell price in the Advanced Dealing Rates window (Advanced Dealing Rates, Sub-Button: Symbols Info) of the Active Trader Trading Station. RollS indicates the interest for sell transactions and RollB indicates the rate for buy transactions.

Please note: The rollover interest rate on Wednesday is approximately three times higher than the interest rate on other trading days. This three-day rollover day compensates for the weekend when the banks are closed.

Why Is Rollover Interest Charged?
Regulations on the spot forex market state that all trades have to be reported and paid within two work days. For example, a trader who sells 100,000 euros on Tuesday has to pay this amount by Thursday or else be charged rollover interest. FXCM thus offers the service of automatically making such payments for its customers. All trades which are still open on the market at the end of the trading day at 5:00 PM New York Time (EST) automatically assume rollover status.

Order Types

The FXCM Active Trader Trading Platform offers a wide array of order options, such as market orders, entry orders, stop-loss orders, trailing stop orders, limit orders and OCO orders. All orders are valid until they are executed or until the trader cancels them (Good Until Cancelled (GTC)). Click here to learn about the different types of orders.

Account Currency

FXCM normally offers U.S. dollars as the account denomination for the FXCM Active Trader Trading Account. On request, even more currencies are usually available.

Margin Watcher

Margin makes it possible for traders to control larger positions than their available account balance. Margin is not a down payment for a transaction. It is more of a guarantee of security against trading losses. Margin is highly practical for short-term traders who need to leverage their capital to realise short-term profits. But leverage is a double-edged sword. Without proper risk management this high leverage can produce both negative and positive results. FXCM offers a unique feature integrated into the FXCM Trading Station, to help traders control their margin as much as possible. As a trader with an FXCM trading account you have a complete overview of your margin requirements so that you always know how much margin you need to cover your open positions and how much margin is available for new positions.

If account equity – the value of all open positions – falls below the margin requirements, all open positions are automatically closed. This is called a “margin call” and it prevents customers from having a negative balance. FXCM traders can thus never lose more than the amount they deposited into the trading account.

If you need additional information, please contact our customer service team, available 24 hours a day, seven days a week.

Active Trader Account

FXCM Awards

2011 FXStreet - Bext FX Awards - Best Broker Research Team: DailyFX

2010 FX Traders' Choice Awards - Eagle Award:
Best FX Broker - Europe Falcon Award: High Broker Satisfaction - Oceania, Americas, Africa Global FX Broker - Overall