Forex

Questions

• How do I calculate margin requirement?
• What do CMC Markets charge on converting foreign currency profit or loss into my home currency?
• How is the holding cost on FX calculated?
• Can I convert currencies using a CMC Markets account?
• Is one unit the same as £1 per point when trading foreign exchange?
• Where do you derive your FX prices from?

Answers

• How do I calculate margin requirement?

  In order to open a position you will be required to deposit an amount of money known as margin. The margin required reflects a percentage of the full value of the position. The first step is to establish the margin rate for the instrument you are trading. Margin rates can be found within the trading platform by selecting 'Library' (which displays the full list of products) from the top navigation toolbar, then select the arrow icon next to the specific product which will show a sub-menu. Choose 'Product Overview' from the sub-menu to view the margin rate details. The margin rates are tiered depending on the size of your position. To see the tiered rates select the arrow icon to the right of the margin rate section.

  To calculate your margin requirement, take your margin rate and multiply this by the total value of the trade.  Your estimated margin is also conveniently displayed within the order ticket. Note, margin is independent of the direction of your position and will increase or decrease in line with the level 1 mid-price point of the product.  If the price increases, your margin requirement will be higher; if the price decreases, your margin requirement will become lower. 

  Learn more about how we calculate our spread betting margins and CFD trading margins.

• What do CMC Markets charge on converting foreign currency profit or loss into my home currency?

  If you are trading forex on our CFD platform there is a charge of 50 basis points (0.5%) to convert foreign currencies into your home currency. No conversion charge will apply if you are spread betting, as all products are priced in your home currency.

• How is the holding cost on FX calculated?

  Holding rates for FX are based on the tom-next rate in the underlying market for the currency pair and are expressed as an annual percentage, with an additional CMC Markets charge of 1% added. To view the holding rates for individual FX pairs, please refer to the 'Product Overview' for the relevant pair.

• Can I convert currencies using a CMC Markets account?

  No, we do not offer currency exchange facilities.

• Is one unit the same as £1 per point when trading foreign exchange?

  One unit is essentially one of the first name currency. If you require assistance with calculating your desired trade size, please contact our Client Management team.

• Where do you derive your FX prices from?

  Prices streamed from our liquidity providers (November 2015 – Deutsche Bank, JP Morgan, Barclays, Goldman, UBS, Citibank and HSBC) are consumed by our automated pricing engine where the ‘best’ and most representative price is used to create our quotes on which clients trade.