Forex Spreads and Trading Conditions at Finotec

The following table will tell you everything you need to know about the trading conditions offered at Finotec: spreads, leverage, minimum and maximum transactions size, trading times, etc.

About our forex spreads and margins

Our Forex margin rates are amongst the lowest available and we maintain a tight trading spread between the bid and ask price. This price is usually fixed except in times of extremely volatile market conditions. There are no additional costs or commissions.

Low margin requirements

Forex is traded on a margin basis, which means that you can use leverage to multiply the market effect of your transaction and this even with a small margin deposit. Depending on the size of your account, you will benefit from 1%-3% leverage on your forex transactions.

Margin calls

When the client's equity drops below 5% of the used margin, the client will get a margin call to refund his/her account. Otherwise, transactions and eventually the client account will be automatically closed to prevent further losses.

*Leverage is expressed in percentage
** Cost of 1 pip for minimum transaction
*** Time is according to GMT (EST=GMT-5)

Swap rates and rollover

Spot Forex positions held at the end of the business day before their Value Date will be rolled over to a new Value Date on a Tom/Next basis.
Spot currency pairs are usually traded on a two-day value date. For instance, the value date for trades executed on a Monday will be Wednesday. However, the value date of a position opened on a Wednesday will be the following Monday since banks are closed on Saturday and since there is no market activity on Sundays. So there is actually a 3-day rollover due to the weekend. The same goes with transactions whose value date falls on a holiday: those trades will also incur or earn additional interest.

Trading spot gold and silver

Spot gold and silver are traded under the Forex module in the Finotec Trading Platform. When trading spot commodities, short selling is as easy as taking a long position. The orders available for spot commodities are the same as those offered for spot forex i.e. market, limit and stop orders.

Orders

Forex trade orders are used to open and close positions automatically when the market reaches the price you have specified. Each time you place or cancel an order and each time an order is executed, you get a confirmation of your order.

You may relate trade orders to conditionally link orders and set up more complex strategies.
You may also use stop-loss orders to limit losses if the market moves against your position.
Orders are used to automatically open Forex positions: you order to buy/sell the currency pair when the price falls/rises to the specified level. Limit orders are also used to close positions and take profit by selling back/buying back the Forex pair when its rate reaches the specified level.

"Day orders" are available for intra-day trading and “good-until-cancelled” are used for longer-term strategies.

Forex forwards at Finotec

Finotec also offers Forex Forward Outrights for purchase or sale of currency pairs at a fixed settlement date in the future. Forward Outrights are used for Forex trades whose settlement dates are longer than the usual 2-day settlement date for spot trades. They are usually used when:

• Trading interest rate differentials: with Forward Outrights, you can take advantage of the interest rate differential between two currencies.
• Hedging exchange rate risks: Many international companies which have business deals abroad are vulnerable to the volatility of Forex markets which can create major uncertainties in their profits and capital. Forward Outrights allow them to circumvent this risk by hedging their currency transactions and receiving or delivering the given currency at a set price and thus neutralize exchange rate fluctuations.

Please note that these conditions may change at the discretion of your broker.