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Margin FX Trading Services

How does it work?

Scenario Analysis

Assuming customer has a collateral account in USD and he buys 100,000 units of EUR/USD at the ask price of 1.3036, while the bid price at that moment is 1.3031. Below are examples to illustrate the investment returns basing on different scenarios of exchange rate movement.
Items
Scenario 1 – at start
Scenario 2
Scenario 3

Initial open position (USD):

+130,360

=(+100,000 * 1.3036)

+130,360

=(+100,000 * 1.3036)

+130,360

=(+100,000 * 1.3036)

Margin required (USD):

6,518

(Leverage ratio = 20)

6,518

(Leverage ratio = 20)

6,518

(Leverage ratio = 20)

Exchange rate movement direction:
No change
Favourable
Unfavourable
Final exchange rate at close (bid rate):
1.3031
1.3136
1.2936
Exchange rate spread / difference:

-0.0005

=(1.3031 – 1.3036)

+0.0100

=(1.3136 – 1.3036)

-0.0100

=(1.2936 – 1.3036)

Realised profit / (loss) (USD):

(-50)

=(+100,000 * -0.0005)

+1,000

=(+100,000 * +0.0100)

(-1,000)

=(+100,000 * -0.0100)

Return on investment (USD):

(-0.77%)

(-50 out of 6,518)

+15.34%

(+1,000 out of 6,518)

(-15.34%)

(-1,000 out of 6,518)

Assuming customer has a collateral account in USD and he buys 100,000 units of EUR/USD at the ask price of 1.3036, while the bid price at that moment is 1.3031. Below are examples to illustrate the investment returns basing on different scenarios of exchange rate movement.
Items

Initial open position (USD):

Scenario 1 – at start

+130,360

=(+100,000 * 1.3036)

Scenario 2

+130,360

=(+100,000 * 1.3036)

Scenario 3

+130,360

=(+100,000 * 1.3036)

Items
Margin required (USD):
Scenario 1 – at start

6,518

(Leverage ratio = 20)

Scenario 2

6,518

(Leverage ratio = 20)

Scenario 3

6,518

(Leverage ratio = 20)

Items
Exchange rate movement direction:
Scenario 1 – at start
No change
Scenario 2
Favourable
Scenario 3
Unfavourable
Items
Final exchange rate at close (bid rate):
Scenario 1 – at start
1.3031
Scenario 2
1.3136
Scenario 3
1.2936
Items
Exchange rate spread / difference:
Scenario 1 – at start

-0.0005

=(1.3031 – 1.3036)

Scenario 2

+0.0100

=(1.3136 – 1.3036)

Scenario 3

-0.0100

=(1.2936 – 1.3036)

Items
Realised profit / (loss) (USD):
Scenario 1 – at start

(-50)

=(+100,000 * -0.0005)

Scenario 2

+1,000

=(+100,000 * +0.0100)

Scenario 3

(-1,000)

=(+100,000 * -0.0100)

Items
Return on investment (USD):
Scenario 1 – at start

(-0.77%)

(-50 out of 6,518)

Scenario 2

+15.34%

(+1,000 out of 6,518)

Scenario 3

(-15.34%)

(-1,000 out of 6,518)

Instruction alternatives

When you are placing an Instruction to trade, you may, at your discretion, specify Price Bounds, Take Profit, Stop Loss and/or Trailing Stop limit applicable to the trade Instruction. You should not specify any such limit unless you understand how they work and are willing to assume the associated risks. In particular:

  • If you specify a Price Bound (upper bound and / or lower bound) for a given Instruction, and when the Instruction (whether given by way of a Market Order or a Limit Order) is received by the Bank's Trading System, the bid or ask price (as the case may be) is beyond the Price Bound, the Instruction will be automatically cancelled and will not be executed even if prices subsequently move within the Price Bound again. You will therefore need to place a new Instruction again if you wish to execute a Margin FX Trade within the same Price Bound or another Price Bound. For Limit Order, Price Bound checking will be carried out when the specified target price has been reached and before the order is executed. If the bid or ask price in the Bank's Trading System at that moment of execution is beyond the Price Bound, the order will not be executed. In no circumstance shall the Bank be liable for any losses or damages you may incur as a result of any cancellation of any Price Bound Instructions.
  • Any Take Profit, Stop Loss and/or Trailing Stop specified in respect of an Instruction (whether given by way of a Market Order or a Limit Order) will only apply if and after such Instruction is executed. If the order for an Instruction is not executed because the Price Bound or the specified target price of the Limit Order has not been reached, none of the Take Profit, Stop Loss or Trailing Stop order will be triggered.
  • If you specify Take Profit, Stop Loss and/or Trailing Stop in respect of an Instruction, when any of the Take Profit, Stop Loss and/or Trailing Stop is triggered, the system will try to place the relevant order using the price specified, but the final executed price may be less favourable than the price you specified.
  • Stop Loss and/or Trailing Stop may act to your disadvantage as a result of fluctuations in the market. Stop Loss and/or Trailing Stop should only be used with caution and after taking into account of the market conditions and fluctuations and the risk you are prepared to assume.

Interest on Open Positions

  • Rollover interest will be incurred when there are open positions. Depending on the currency pair and the long or short position involved, net interest will be paid or charged to your trading account. For example, as at 23 April 2012, if customer longs AUD short USD, net interest will be paid to customer; if customer short AUD long USD, net interest will be charged to customer.
  • Interest calculation will be carried out on a daily basis following the end of the day, for any Open Positions held at the end of the Trading Hours (5pm New York Time).
  • System will calculate the duration in days from last interest calculation, and use that to compare against the number of days in a year (365 days if it is not a leap year or 366 days if it is a leap year) to calculate interest amount that should be paid out or charged to customer.
  • Information on annual interest rate is available at the online Margin FX trading platform or on your Margin FX account statement.

Please refer to the Product Factsheet of Margin FX Trading Services for more details.

Introduction to Technical Analysis

Indicators to show on the graph

Overlays

Trend Lines

Candlesticks

Risk of trading in leveraged foreign exchange contracts:

The risk of loss in leveraged foreign exchange trading can be substantial. You may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives. 

Risks relating to RMB - ^ Margin FX Trading Contract is denominated in offshore RMB rates as traded in Hong Kong. CNH is different from that of RMB traded in Mainland China. You should note that the value of RMB against other foreign currencies fluctuates and will be affected by, amongst other things, the PRC government's control (for example, the PRC government regulates conversion between RMB and foreign currencies), which may adversely affect your return under this product. The value of your investment will be subject to the risk of exchange rate fluctuation.