Volume of transactions
1.Klient opens a deal in a lot EURUSD at the rate of 1.44. Leverage provided by the broker to the client, is 1:100. What will be the collateral for this deal?
A lot, as stated above - is 100,000 units of base currency. The base currency, in this case is the euro. Consequently, the client has opened a deal to buy 100,000 euros for U.S. dollars. The euro against the dollar - 1.44, that is, to pay 100,000 euros to 144,000 USD. The money paid by a broker, taking a client to pledge a sum of one hundred times lower (leverage = 1:100). Thus, the collateral for the transaction is 1440 USD.
2.Klient has a deposit of 5000 USD. What is the maximum amount of the transaction, the client can open on EURUSD at 1:100 and 1.5 course?
Given that the client's deposit is 5,000 USD, a customer can open a transaction not more than 500 000 USD. With 1.5 we know that the client can open a transaction is not more than (500,000 / 1.5) = 333 333, (3 euros). If we translate it into lots, get lots a maximum of 3.33.
One of the major terms of trade in the Forex market is the minimum possible amount of the transaction. The smaller the minimum amount, so, theoretically, the less you can "download" deposit.
Auctions are fractional - for example, 0.1 lot, in terms of money that provides 10,000 units of base currency. Some brokers also offer fractional lot at 1000 units, that is, 0.01. However, for brokers, which has real access to the interbank market, it brings more losses than profits, because such small volumes of transactions do not give a tangible profit from the spread, and the cost of their registration, and deprives the small profit.
In the Alpha Forex minimum possible amount of the transaction - 10,000 units of base currency (0.1 lot) with the smallest possible increments of 0.01 lots. That is, the client can open a trade by 0.1 lots, Lot 0.11, 0.2 lots and so on almost ad infinitum.
In addition to the minimum, some brokers also limit the maximum amount of the transaction. Typically, this occurs because of a lack of contractors, or about the fact that counterparties will be able to deliver the required amount of currency.
Alpha-Forex works directly with contractors, Alfa-Bank, and therefore liquidity problems do not arise, and the maximum amount of the transaction is not limited.
When it comes to the transaction, it is important to understand what is measured by profit or loss on it, as well as the difference between the purchase price of the currency and the selling price. We have already mentioned the spread, this is the difference, but now explain how this spread is calculated, and why the Alpha Forex most profitable spreads in the market.
