Posted by CNC Job Offers on 12:47 AM
- What is pip?
For the foreign exchange, the smallest pip is 1/10000, which means as the fourth decimal place. In case of EUR/USD, if the spread is 3, then the exchange rate can be like 1.2500/1.2503. In the currency pairs, the Japanese yen is the only exception. The exchange rate for USD/JPY only has two decimal place. For example, for the spread with 3, the exchange rate can be like 114.05/114.08. PIP means the smallest unit of the price. For EUR/USD, if the spread is 1 pip, the rice may be 1.2500/1`.2501
- What is the spread?
The difference between the asking price and the biding price is called spread. For example, the bank quoted the exchange rate of USD/JPY is 113.20/25, means that the bank wants to pay 113.20 JPY for 1 dollar. At the same time, the bank wants to sell for one dollar as 113.25 JPY. This 0.05 differences between them is the spread. The spread is depended on the liquidity of each currency.
- What is position?
Position is like a promise, which promised to sell or buy. Buy a position when the price will go up, sell a position when the price goes down.
- What is margin?
Margin is the amount required to open a new Forex position. Essentially, it is an amount set aside from your free equity, so you can undertake your new trade.
- What is the margin rate?
Net worth/used margin= margin rate. When the margin rate less than 100%, the system will close the position automatically.
- What is overnight?
Overnight is to extend the settlement date of the opened positions to the next settlement date. For example, you sell one lot of USD/JPY on Tuesday, the trading must be delivery on Thursday, unless the yen positions to be extended overnight. Formax usually extend the undealed positions automatically at 5 o 'clock in Beijing time.This kind of extension can create swap rate.
- What is swap rate?
The swap rate refers to the difference between the exchange rates. Each foreign exchange pair has two different currencies, each currency has different interest. If the interest of the buying currency is greater than the selling currency, then you can earn the swap rate, otherwise, you will pay the swap rate.
- What is net?
That is the net balance of the current account. It is including the profit and loss of current positions, and the balance varied when profit/loss changed.
- What is margin?
Margin is the amount required to open a new Forex position. Essentially, it is an amount set aside from your free equity, so you can undertake your new trade.
- What is margin call?
It is when the available margin account goes to zero. In other words, the positions will be closed automatically when there is a margin call.
