Forex Dealing Details - Spreads, Margin & Rollover

Dealing Hours

The dealing desk is open 24-hours a day from Sunday 4 PM New York time until Friday 4:30 PM New York time. Quotations, order placement, and confirmation available online or via telephone.

General Forex market hours are as follows:

Dealing Spreads

FX Solutions offers the following 20 currency pairs:

Margin

The table below shows an example of the margin required for each contract size in the major currency pairs based on spot rates of 1.2100 for EUR/USD and 1.7700 for GBP/USD. Margin required is subject to change in market rate.

In a live account, the margin required for each non-dollar based currency pair will be converted to U.S. Dollars, in real-time, at the prevailing market price for that pair. Once the equity in an account falls below the margin required to maintain all existing positions, then all open trades will be closed at the prevailing market rate.

Required margin for selected currency pair:

The table uses 100:1 leverage for purposes of calculating the margin requirement. The margin requirement will vary based on the level of leverage used.

For US based currency pairs:

Margin = (Contract Size/Leverage)

For Example:

USD/JPY 100,000 at 100:1 leverage will require margin of $1,000 ($100,000/100)

For Example:

GBP/USD 100,000 at 100:1 leverage will require margin equivalent in US Dollars to GBP 1,000 not $1,000. (GBP 100,000 / 100) * 1.7700 (current GBP/USD exchange rate) = $1,770

Rollover/Interest Policy

In the spot Forex market trades settle in two business days. If a trader sells 10,000 euros on Tuesday, the seller must deliver 10,000 euros on Thursday unless the position is held open and rolled over to the next value date. As a service to our traders, FX Solutions automatically rolls over all open positions to the next settlement date at 5:00 PM Eastern Standard Time. Roll over involves exchanging the expiring position for a position expiring the following settlement date. The positions being exchanged are not valued at the same price. If a trader is long the currency bearing the higher interest rate, the position "being sold" is worth more than the position being acquired. The reverse is also true; if a trader is short the currency bearing the higher interest rate, the trader is acquiring a position worth more than the one "being sold". The amount of the difference varies based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day.

FX Solutions operates a “3 Tier” system of daily premiums that reflects the degree of leverage chosen by the client.

Tier 1 – Institutional
This set of rates is available to accounts that select leverage of 50:1 or less. The rates offered are directly based on the interest rate differentials in the interbank cash market and closely reflect the rates available to more unleveraged, institutional-type participants in that market.

Tier 2 – Retail
This set of rates will apply to accounts that select a leverage of 100:1. The rates are based on those available in the interbank market but include an additional spread which will take into account the higher degree of leverage chosen by retail forex accounts.

Tier 3 – Leveraged
This set of rates will apply to those accounts that select leverage of 200:1 or higher. Although based on the rates available in the interbank market, these rates have been adjusted to include a “cost of capital” spread. This spread is based on the institutional lending rate charged to cover the capital costs of maintaining positions on a leveraged basis. By choosing a significantly higher degree of leverage, a client is basically borrowing against the net capital of the brokerage company.

At 5:00 PM each day, funds are subtracted from or added to accounts with open positions because of this automatic roll over.

Note
On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position is three times the usual amount. This "3-Day" rollover accounts for settlement of trades through the weekend period. When there are bank holidays in either settlement country the normal roll schedule does not apply.

* The “end of day” premium process commences at 5pm Eastern Time each day and can take several minutes to complete. Trades that are open at 5pm will generally receive or be charged a premium based on the change of value date. Clients seeking to place trades to earn interest should always make sure that they have sufficient equity in their account to “maintain” those trades. They should not rely on the application of the end-of-day premium to sustain their positions and FX Solutions will not be held liable for any account that receives a margin call under these circumstances.