CFDs and Forex FAQs
Q: What is a CFD?
A: A CFD stands for Contract for Difference. Simply put, it is a two-party agreement to exchange the difference between the opening and closing price of a specific financial asset. CFDs are actually derivative products that allow investors to trade on real-time market price changes, without actually having to own the instruments their contracts are based on. CFDs can be used to speculate on the possible future movements of different market prices irrespective of whether the specific markets are going up or down. Traders are able to buy and benefit from rising prices as well as to sell and benefit from falling prices. Additionally, with our huge choice of tradable markets, you can gain exposure to markets you might not have been able to access before. We offer CFDs on commodities, shares and indices.
Q: What is Forex?
A: Forex is a shortened term used for ‘Foreign Exchange’. It is the process of buying and selling currencies. The foreign exchange market is the biggest and most liquid financial market in the world. The market operates 24 hours around the clock from Sunday night through Friday and comprises central banks, currency speculators, organizations, governments, retail investors and international investors. Over the years, the size of the Forex market has been constantly increasing. According to the Bank for International Settlements’ (BIS) 2013 Triennial Survey of global FX market volumes, the average daily volume in the global Forex markets was estimated at $5.345 trillion, 34% higher in than the $3.971 trillion in April 2010 ($3.21 trillion daily in April 2007 and $1.7 trillion in 1998).
Q: How does CFD and Forex trading work?
A: Forex is traded in currency pairs while CFD’s are commonly a financial instrument that is valued in a specific currency. Common currency pairs are the Euro/US Dollar (EUR/USD), US Dollar/Japanese Yen (USD/JPY), Great British Pound/US Dollar (GBP/USD), Euro/Japanese Yen (EUR/JPY) and Australian Dollar/US Dollar (AUD/USD). You can buy and sell each currency or financial instrument.
Q: What are the Market trading hours?
A: Normally, during the European and North American winter time, weekly activity begins on Sunday at 22:05 GMT continuously until Friday 21:00 GMT. During the Day Light Saving times in these regions, the weekly market activity begins on Sunday at 21:05 GMT and ends on Friday at 20:00. Market activity hours may vary due to public holidays or due to unusual liquidity conditions which may arise from exceptional global events. Opening or Closing times may also be altered by FXMARKER due to liquidity and risk management considerations. Please be advised that while most of the instruments are traded on a 24 hour basis without interruption, some instruments, mainly shares and indices, have special Trading Hours.
Q: What tools do I need to trade online?
A: To be able to trade you only need a device with an internet connection and a funded trading account. In addition, we strongly recommend you to be equipped with Forex/CFD’s or other financial education and trading tools to help you minimize the risks in the market.
Q: How old do I need to be to trade?
A: You must be over the age of 18 to trade.
Q: What is Leverage?
A: Leverage is used to significantly increase your purchasing power. No other market gives you so much liquidity and leverage at the same time. On some instruments, FXMARKER provides a leverage of up to 400:1. This means that with a deposit of $100, you can trade with up to $40,000.
Q: What is a Pip?
A: In financial markets, specifically in the Forex market, pip (percentage in point) is a unit of change in an exchange rate of a currency pair. Most major currency pairs are priced to four decimal places, and a pip is one unit of the fourth decimal point: for dollar currencies this is to 1/100th of a cent.
Q: What is a Spread?
A: The spread is the difference between the BUY price and the SELL price of two instruments. For example, if the EUR/USD is trading at 1.3100 (buy) and 1.3098 (sell), then the spread is 2 pips.
Q: What does going “long” and “short” mean?
A: Going “Long” is when a trader buys an asset expecting its value to rise. This is also called opening a long position. Going “Short” or opening a short position, is when a trader sells an asset, expecting its price to decline so it can be bought back in the future at a lower price.
Q: What is Overnight financing?
A: At the close of each trading day, CFDs become subject to the Overnight Financing process, whereby an interest adjustment is applied for keeping deals open ‘overnight’, or more specifically, during the applicable market’s closure period. The adjustment can be positive or negative, depending on the direction of the deal and the underlying interest rates. On Fridays, Overnight Financing is 3 times the daily value to cover the whole weekend period. For more information, please consult the Trading Conditions
Q: What is a Rollover?
A: All open CFD deals on future contracts, which are not closed before reaching their value date, are automatically rolled over by the Company to the next contract’s value date, so that the deal remains open. Upon effectuating such rollover, the deal’s open P/L (Profit / Loss) will express the price difference between the expired contract and the new one, and will also include a mark-up spread. In addition, all associated Limit Orders shall be adjusted to the new future contract. The Balance adjustment may also include a mark-up spread. During such rollover, the Company may utilize higher margin requirements. For more information, please consult the Trading Conditions
Q: Does the Forex market have a central location?
A: Unlike the equities market, the Forex market does not have a central location. Transactions take place over the internet or phone which is why the market is available 24 hours a day.
Q: How are prices determined?
A: There are various ways prices can change. Economic and political conditions usually affect the value of an asset, along with interest rates, inflation, and supply and demand.
Q: Are orders executed even if the underlying market is closed?
A: No. FXMARKER does not execute orders during off-hours.
Q: Are there any conditions that can affect the rate at which my Market Orders are executed?
A: Yes, during market conditions that are characterized by high volatility or communication latency, and due to the time it takes for an order to be executed, market orders may sometimes be executed at a different rate than requested.
Q: Can I place Limit Orders when the market is closed?
A: Yes. Even when the market is closed, it is possible to add, change and remove Limit Orders on all instruments.
Q: What are the costs for opening & closing deals on CFDs through FXMARKER?
A: FXMARKER does not charge any fee or commission for opening & closing deals on CFDs. The clients’ costs are derived from the spread - this is the difference between the buy price and the sell price, which is always displayed on your trading screen. Overnight financing applies where applicable. direct commission based fee for trading Commodity and Index based CFDs. The clients’ costs are derived solely from the spread - this is the difference between the buy price and the sell price, which is always displayed on your trading screen.
Q: What happens if a deal remains open overnight?
A: When you hold a deal open overnight it is subject to a credit or debit adjustment. This adjustment depends on the type of deal you hold (either Bought or Sold) and on the relevant Inter-Bank interest rates (plus a mark-up). For detailed information on the above, please check our Trading Conditions
Q: Who is FXMARKER?
A: FXMARKER is a financial service provider that gives clients direct access to the currency exchange market, allowing them to trade a variety of financial products, including Forex, Indices and Commodities. FXMARKER is proud to offer traders advanced technology, a diversity of tradable products and a high level of customer care.
Q: Which assets and products can I trade at FXMARKER?
A: FXMARKER offers a variety of tradable products and they include:
1. CFDs on Commodities, Shares and Indices such as Crude Oil, Nikkei, US 30, Apple and Facebook.
2. Spot and Forward on a huge selection of Precious Metals and Currencies such as the EUR/USD, EUR/JPY, AUD/USD, Silver and Gold.
Q: What services do FXMARKER offer?
A: FXMARKER provides its clients with Forex trading education, 1-on-1 tutorials, technical assistance and customer care in a variety of languages. FXMARKER offers rolling spot currency trading and other transactions and CFDs to its clients. FXMARKER’s experienced dealers are available to clients to ensure they can take advantage of the most competitive prices and the ability to make trades in real-time.
Q: What are the different accounts offered by FXMARKER?
A: FXMARKER traders have access to a variety of different accounts designed to meet the individual needs of our clients.
Q: What is an Islamic Account?
A: An Islamic Account is an interest-free account which adheres to Islamic Sharia Laws applicable to Forex and CFD Trading.
Q: How is online trading done?
A: FXMARKER provides its clients with the choice of three user-friendly online trading platforms. These include a web based platform, a downloadable platform for PCs and a mobile trading platform for smartphones.
Q: What is the minimum deposit required to trade online?
A: To open a new transaction and trade online, you need a minimum deposit of US$100. The minimum transaction size for a new account is $2,500 (or the equivalent), with up to 1:400 leverage
Q: How do I fund my account?
A: FXMARKER facilitates deposits made both online and offline for your convenience. The options include: Bank Wire, Credit Card, Debit Card and eWallets. For further information regarding wire transfer deposits, please email email@example.com
and provide your name, telephone number and your request.
Q: How will my credit card deposits appear on my card statement?
A: Credit card transactions will appear on your statement as 'fxmarker.com'.
Q: How do I withdraw funds from my account?
A: To withdraw money from your trading account, login and generate a Withdrawal Request from the withdrawal page.
Requests to transfer funds to a third party account will not be processed.
Withdrawing money from an account is only possible after signing and sending in the following documents:
(Documents 1, 2 and 3 are only required once)
1. Personal identification: passport, driving license or any other government issued document with your photograph and signature and evidence of your name, date and place of birth, citizenship. (Copies of the front and back).
2. Proof of current residence:
Possible documents that meet the requirements. (Please note PO Boxes are not acceptable and the document must be less than six months old)
Utility bill (e.g. gas or electricity bill)
Telephone or Mobile phone bill
Municipal Rates Invoice Statement
3. If you have made deposits by Credit Card or Debit Card, please send a copy of both sides of the card as follows:
Please note: We only require to clearly see the cardholder name, the last 4 digits of the card number and the expiry date.
Cover the CVV Code
Conceal the first 12 digits on the front side of the card, leaving only the last 4 digits visible
4. Credit card deposits and withdrawal confirmation (Click "Continue" in order to generate and print this document)
In order to ensure the upmost security and to comply with the withdrawal requirements, please send the documents using one of the following methods:
The Secure Upload System: This is method is preferable as it will allow the compliance department to directly receive all of your documents and process them immediately
By fax to the compliance department at +35-227-862-189
Please note: you may send your Proof of ID and Proof of Residence by email to firstname.lastname@example.org
Please do not send copies/details of credit/debit cards by email.
Upon withdrawal, any money deposited via credit cards will be credited up to the amount deposited. Any funds that exceed the deposited amount will be paid via wire transfer to your bank account – details of which must be provided below. (A $20 bank fee will apply to wire transfers)
If a credit card that has been used to deposit finds to your account has been cancelled, funds from a withdrawal will be returned to the bank or vendor which issued the card.
If the currency of the funds withdrawn from your account is different to the currency of your credit card and/or bank account, the withdrawal amount will be converted by the bank/vendor using the exchange rate at that time.
If you wish to withdraw funds in a different way to those described above, please email your request to the accounting department at email@example.com with your name and contact number. Please note that due to certain regulatory limitations a withdrawal method other than the ones stated above is not be guaranteed and is subject to FXMARKER’s sole discretion and applicable laws and regulations.
While having an open exposure, the amount you may withdraw is subject to the minimum margin requirements.
Q: Does FXMARKER use Margin Calls?
A: No, FXMARKER does not use Margin Calls. Margin Call is a term commonly used by Forex Broker which refers to a closure of all open positions by a broker when the level of minimum margin security is breached. Commonly the minimum level of margin is been 1% and 2% during the week, and between 3% and 4% during weekends and holidays. This can result in positions being closed even if a client has an available positive balance in their account. FXMARKER believes in giving its traders full use of their available account balance as a margin for their open positions, meaning that positions will remain open providing that the trader has an available positive balance in their account.
Q: What advantages does FXMAKER have over its competitors?
A: No Commission for opening & closing positions
FXMARKER does not charge any commission for opening & closing positions, though there is a spread between the buy and sell rates, which some may view as an indirect cost. The spread between the buy and sell rates is customary in all dealing rooms and online trading platforms throughout the world. The spread FXMARKER offers for spot and forward positions ranges between 0.02% (2:10,000) and 0.05% (5:10,000) for the Major currencies and higher for some exotic crosses or currency pairs which tend to have lower liquidity. Commodities or indices CFDs' spreads vary according to the product..
No Daily Renewal Cost
In contrast to other dealing rooms, FXMARKER treats spot trading as banking transactions. The process of rolling-over an existing position is carried out using the spot and interest rates relating to the market. Forward points are added to or subtracted from the deal rate, which is dictated by the differences in interest rates relating to the currency pair of the deal.
Full Margin Usage
FXMARKER does not use full Margin Calls. We give our clients the freedom to use their balance in full favor of their open positions. As a result, no deal will be ended as long as a client has an available positive balance in their account.
24 Hours of Support
FXMARKER offers support services 24 hours a day.
Utilizing Future Profit in Order to Open a New Position
At FXMARKER the investor is not obliged to set a stop loss rate. The investor has full control over his or her exposure and so he/she may open new positions based on future profits from existing open position.
Constant up-to-date Account Monitoring Options
FXMARKER traders have the ability to view their open positions, collateral and exposure values in real time. The ability to view their trades in real-time ensures that traders have full control over their portfolio, aiding in efficient management of the account.