Trade all our forex contracts commission-free. You can open a new forex position from just 2% of the contract value.
Depending on conditions in the underlying market, our spread can be as low as 0.8 pips on major currency pairs, such as EUR/USD, USD/JPY and AUD/USD. Plus from 1 pip on GBP/USD and EUR/GBP. All our contract sizes are set out in the Contract Details.
Opening the position
You decide to go long on the euro against the US dollar. On the date in question, our quote is 1.36400/1.36408, and you buy 1 contract (the equivalent of €100,000) at 1.36408.
The value of your position is €100,000 x 1.36408 = US$136,408. To open the position you supply a deposit of just 2% of the position. Your deposit is therefore 2% x US$136,408 = US$2,728.16. There is no commission to pay on forex trades.
Interest adjustments
While the position remains open, your account is debited or credited to the current Tom/Next rate. Tom/Next expresses in pips the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency being notionally bought overnight. An administrative charge not exceeding 0.3% per annum applies on either side of the current Tom/Next spread. This maximum charge will apply to both standard and mini-contracts.
Closing the forex position
A few days later, EUR/USD has risen to 1.37400/1.37408 and you take your profit by selling 1 contract at 1.37400. Your gross profit on the trade is calculated as follows:
Profit
| Closing transaction US$100,000 (1 contract) x 1.37400 = US$137,400 |
| Opening transaction US$100,000 (1 contract) x 1.36408 = US$136,408 |
Gross profit: US$992
To calculate the net result you also have to include interest adjustments and the administrative charge mentioned above. For more information see Contract Details.