Bid/Ask Prices: Bid is the price at which you may sell a particular financial asset. Ask is the price you may buy a financial asset. Bid price is lower than the Ask price.
Spread: Spread is the difference between the bid and ask prices.
Market Order: A market order is an order, to buy or sell a financial instrument, at the market price. However, note that the price requested cannot be guaranteed due to the volatility of the foreign exchange market and usually, market conditions affect the price requested.
Limit / Pending Order: Limit Orders, counter to Market Orders, are not instantly executed but the trader chooses a level of price that seems interest to them and a time period during which the order could be opened. The order opens when the market conditions meet the level of price set out by the Client within the defined time period. Otherwise, the Limit Order is left open until it expires, or is cancelled by the Client. Again, the price at which a Limit Order may open cannot be guaranteed, due to the same reasons, as Market Orders above.
- A Stop Loss is combined with an open or pending order and is used to minimize losses if the market moves to the opposite direction for the specific order. Such orders may not be guaranteed in circumstances of highly volatile markets due to possible rapid price movements, or during the opening of the market.
- A Take Profit is also combined with an open or pending order and is used to close the order with pre-defined profits. Such orders may not be guaranteed in circumstances of highly volatile markets due to possible rapid price movements, or during the opening of the market.
- A Buy Limit is an order to buy a financial instrument below a specific price, used by investors who believe that if the rate falls furthermore, then there will be a reversal.
- A Sell Limit is an order to sell a financial instrument above a specific price, used by investors who believe that if the rate goes further up, then there will be a reversal.
- A Buy Stop is an order to buy a financial instrument at a price above the current market price, used by investors who believe that the rate will rise further.
- A Sell Stop is an order to sell a financial instrument at a price below the current market price, used by investors who believe that the rate will fall further.
Balance and Equity: Balance and Equity are the same when there are no open positions. When there are open positions, the floating profit/loss from the open positions plus the account Balance is the Equity. Hence, Balance is the amount of money in the account when there are no open positions, and the Equity changes in real time as the price of the open positions changes.
Two important concepts that go hand in hand is margin and leverage. Leverage enables the trader to get a greater exposure in the market, which subsequently can increase the profitability of a trade but in the same way it can magnify its losses. Margin is used to get leverage and in leveraged trading, the margin amount is set aside to collateralize the account against credit risks arising from the trading operations. For example, if your account is set at a leverage of 1:100, the margin that is reserved is 1% of your trade size.
When there is not sufficient equity in the account to support the trader’s open positions (Margin Call level), the Company will provide a margin call warning to notify the trader. The margin call policy guarantees that the maximum possible risk does not exceed the equity of the account. When the margin level continues to drop until the Stop Out level is reached, the open positions will automatically start to close at market execution price.
The Company offers the flexible service for traders to trade using leverage on a range level from 1:1 to 1:400, depending on the asset and account group. Each Client has the choice of their leverage requirements which are dependent on the account type of the Client. The chosen leverage can be increased or lowered anytime subject to the account holder’s request.
The purpose of the use of leverage is the increase of the potential return on investment, but due to volatile market conditions the investment can be led to significant risks of losses.
Hence, it is important for each Client to remember that trading with high leverage involves accordingly a high level of risk. Please refer to the Company’s Risk Disclosure statement for more information.
The Company does not charge a rolling commission but instead an overnight commission may be paid or charged on positions that are held overnight, depending on the direction of the trade. i.e buy or sell. Simply, the particular fee is calculated when a trader leaves a position open after 00:00 GMT. At the end of every trading day, at 00:00 GMT, the trader will pay or receive the interest rate on all assets traded on our platform.
In currency trading, the difference between the expected price of a trade and the price at which the trade is in fact executed is known as ‘slippage’. ‘Slippage’ is a normal market practice and a regular feature of the foreign exchange markets under conditions such as illiquidity and volatility due to e.g. economic events, news announcements, and market openings. Therefore, it is important to note that the price at which a trade is executed may differentiate significantly from the original price requested from the Client during abnormal market conditions.
Our trading hours are from Sunday 22:00 GMT to Friday 21:00 GMT. Be informed that we reserve the right to change our trading hours at any time and without prior notice.