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Knowledge base: FAQ
Account Types and Trading Terms
Posted by Olga Palikarpava on 24 September 2013 06:07 PM
  1. Are your spreads fixed?

    Our spreads are not fixed and depend on the buy and sell orders, which are currently available in the Marketplace.


  2. Can I get Margin Call if I have no free Margin?

    Margin Call happens when a client's account equity falls below the required Margin to maintain open positions. It’s done automatically. On market-maker accounts (Micro accounts) Margin call happens when Margin level falls below 20% (i.e. Equity falls below 20% of Margin for open positions). When Margin level falls below 10% (i.e. Equity falls below 10% of Margin for open positions) the losing position will be closed automatically by the broker (Stop Out).

    Example 1:

    The 0.1 lot trade opened with a Margin requirement of $27 will be subject to a Margin Call when the account Equity falls to $5.4 or less. When the Equity falls below $2.7 the order will be closed automatically by Stop Out.

    On ECN accounts Margin Call happens when Margin leve l falls below 100%. The losing orders are closed automatically by Stop Out at Margin level of less than 50%.

    Example 2:

    The 1 lot trade opened on ECN account with a Margin requirement of $300 will be subject to a Margin Call when the account Equity falls to $300 or less. When the Equity falls below $225 the order will be closed automatically by Stop Out.

    Please, note that If the order was closed by Stop Out, you can find the information about it in trading terminal MetaTrader 4. Open the window Terminal, the tab Account History and check the column Comment. If you cannot find this column in the tab Account History right click in the tab and choose Comments.


  3. Do you allow using Expert advisors on Micro accounts?

    Yes, we allow to use Expert Advisors in Micro accounts with the following limitations:

    • Stop loss, Take profit and Pending orders can be set 10 pips or more away from the current price.
    • Your trades must be open for more than 1 minute.

  4. Does FXOpen offer bonuses?

    For the latest information, please see the Our Promotions page on our site.


  5. How can I open a SWAP-free account?

    Click the Register button on FXOpen website and fill in the registration form. E-mail [email protected] with your request to make your account SWAP-free one. In your e-mail indicate your FXOpen account number and attach the documents which can prove, that you are a Muslim.


  6. How long are positions maintained?

    As a general rule, a position is kept open until one of the following occurs:

    • realization of sufficient profits from a position, the specified Take profit is triggered;
    • the specified Stop loss is triggered;
    • you close your order manually as another position that has a better potential appears and you need these funds;
    • the broker closes a losing position by Stop Out.

  7. How long does it take to confirm a deal?

    Deals are confirmed on screen, typically within 1-2 seconds. The full transaction details including the reference number, date, time, notional amount bought and sold, Stop loss and Take profit levels may be accessed in the MetaTrader 4, window Terminal, tabs Journal and Trade.


  8. How to Calculate 1 Pip Value for 5th decimal pricing?

    Pip value for ECN/STP accounts (5th decimal pricing)

    Pip (percentage in point) is the smallest change in four decimal place currency quotes (as well as in two decimal place quotes for pairs containing JPY). The fifth digit after the decimal point in quotes for currency pairs (as well as the third one for pairs with JPY) shows the price change discreteness within the four (two) decimal place quotes, i.e. the minimum qoute change.

    Quotes with 5 decimal places allow better transparency and better ability to catch better deals. For example, instead of 2 pips spread (1.5030 Bid 1.5032 Ask), a trader can get a 1.7 pip spread (1.50301 Bid 1.50318 Ask).

    To know what a pip is in 5 digit quote, take the exchange rate and count 5 digits backwards. For instance, the EUR/USD is at 1.00615. Count 5 digits from the first: 1, 0, 0, 6, 1. The 1 is the 5th digit in the quote and it's at the 4th position after the decimal point, so a pip for the EUR/USD is 0.0001. The last digit in 5 decimal pricing is a ‘fractional’ pip. In our example is 8.1 ‘fractional’ pip is 0.1 of a pip. To calculate pip value you can use the following formula:

    Example 1. 0.1 standard lot EUR/USD at the price 1.33391.

    To convert EUR 0.07496 to USD you must multiply:



    As you can see from the example 1 - ‘Fractional’ pip value is $0.1 that means 1 pip value is $1.

    Example 2. 0.1 standard lot USD/JPY at the price 84,058.

    As you can see from the example 2 - ‘Fractional’ pip value is $0.1 that means 1 pip value is $1.


  9. How to Calculate 1 Pip Value in 4th decimal pricing?

    Pip value calculation

    A pip is calculated by the quote currency (the second one in the pair). To calculate pip value you can use the following formulas and examples:

    Example 1.

     

    Market price

    EUR/AUD

    1.4228/38

    1 point = 10 AUD

     

    AUD/USD

    0.9778/81

    1.0 USD = 0.9778 AUD

     

    10 AUD = 10*0.9778 = 9.778 USD

     

    Example 2.

     

    Market price

    EUR/CHF

    1.3680/83

    1 point = 10 CHF

     

    USD/CHF

     

    1.0 USD = 0.9886 CHF

     

    10 CHF = 10/0.9886 = 10.1153 USD

     

    Example 3.

     

    Market price

    USD/CHF

    0.9883/86

    1 point = 10 CHF

     

    1.0 USD = 0.9886 CHF

     

    10 CHF = 10/0.9886 = 10.1153 USD

     

    Example 4.

    EUR/USD

     

    1 point = 10 USD

     


    Pip value calculation for Gold/Silver

    To calculate pip value for Gold/Silver you can use the following formula:

    Example 5. 0.1 lot Gold.

    Example 6. 10 lots Silver.

     
     
     
  10. Limitations on News Trading: Freeze Time.
    The limitations that apply to news trading in Micro accounts.

    During a specific period of time (Freeze Time) before, during and after an economic event announcement (news) Pending Buy and Sell Stop orders cannot be placed, closed, deleted or modified. These limitations apply to a single Buy/Sell Stop Pending order, as well as to opposite Buy/Sell Stop Pending Orders. By opposite (or ‘Corresponding’) stop orders we mean two stop orders (a Buy Stop and a Sell Stop) placed on the same currency pair, at the same time.

    If you try to place, modify or close a Buy/Sell Stop Pending Order during the Freeze Time, you will see an error message in your MetaTrader 4.

    On the average, the Freeze Time period begins several tens of seconds before a news announcement, but its exact duration may vary depending on the nature and importance of the economic event.

    According to the Explanations of Definitions and Terms of Business (Terms and Conditons) for Market Maker (Micro) Accounts:

    Freeze Time – the period of time before, during and after the Event announcement. The Company has the right, at its sole discretion, to define the value of the Freeze Time depending on the situation, on the currencies market, and on the character of the Event.

    Corresponding Pending Orders – two counter instructions from the Customer to the Company (i) to open positions in relation to the same Currency Pair at the same time, using Buy Stop and Sell Stop Pending Orders.

    For more information, please, see section 3.5 of the Terms of Business (Terms and Conditions) for Market Maker (Micro) Accounts 3.5. The Company refuses opening, modification and deletion of all Pending Orders including Corresponding Pending Orders during the Freeze Time.

    These limitations are not applied to ECN accounts.

  11. Orders Execution Rules.

    Stop Loss Orders - Execution Rules

    As a rule, Sell stops are filled on our Bid, and Buy stops are filled on our Ask. This allows FXOpen to fill client’s orders at the rate they requested in almost every case. In the rare cases when the market gaps over a requested Stop Loss rate, the position will be closed at the first available quote which is presented in the quotes flow instantly after the price gap. This is an important point for traders who are accustomed to being filled on sell stops when the offer reaches the requested order rate. For example, if a Stop order is placed to sell USD/CHF at 1.4549, the trader will be filled when the bid reaches 1.4549 (i.e. the bid/offer is 1.4549/53).

    Good Till Cancelled (GTC) Orders - Execution Rules

    A Trade order placed for a specific amount of time to buy or sell a foreign currency, it will be pending until the time you set or until you cancel it.


  12. Stop Out Calculation.

    A critical loss level – Stop Out – is fixed to prevent trader losses in excess of the Margin and available funds on the trading account. Upon reaching this level, broker automatically closes all loss-making positions at the current market price when Margin Level is lower than Stop Out level. Thus positive account balance is kept.

    Market Watch1 point value
    for Lot
    MARGIN for
    Leverage 1 *
    Symbol Bid Ask 0.1 500
    USD/CAD 1.0306 1.034 0.97 20.00 20.00
    USD/CHF 0.9883 0.9886 1.01 20.00 20.00
    USD/JPY 81.72 81.74 1.22 20.00 20.00
    AUD/USD 1.0075 1.0078 1.00 20.15 20.16
    EUR/USD 1.3843 1.3845 1.00 27.69 27.69
    GBP/USD 1.5275 1.5244 1.00 30.55 30.49
    NZD/USD 0.7502 0.7505 1.00 15.00 15.01
    GOLD 1,384.2 1,385.2 0.10 138.42 138.52
    SILVER 28.44 28.48 5.00 142.20 142.40


    Equity30
    Stop Out (Short)Stop Out (Long)
    Equity after StopOut Pips till StopOut Price of StopOut (Ask) Equity after StopOut Pips till StopOut Price of StopOut (Bid)
    2.00 29 1.0335 2.00 29 1.0311
    2.00 28 0.9911 2.00 28 0.9858
    2.00 23 81.95 2.00 23 81.51
    2.02 28 1.0103 2.02 28 1.0050
    2.77 28 1.3870 2.77 28 1.3818
    3.06 27 1.5302 3.05 27 1.5217
    1.50 29 0.7530 1.50 29 0.7949
    13.84 162 1,385.82 13.85 162 1,383.59
    14.2200 4 28.47 14.24 4 28.45

    * Only USD containing currency pairs can be used to calculate Stop Out prices for cross-rates since it is impossible to foresee exchange rates of two currency pairs at one and the same time in future.

      Short Long
    USD base
    USD quote
     

    where

    P&L — is Profit and Loss;

    Equity — is the account balance plus unrealized gains and minus unrealized losses.


  13. What are Islamic accounts? Do you provide SWAP-free accounts?

    FXOpen provides SWAP-free accounts for Muslim clients. In Islamic accounts, no SWAP fee will be charged or added when your open positions are rolled over the night or weekend. Otherwise, Islamic accounts trading conditions are exactly the same as regular Micro, ECN or STP accounts.

    Starting February 2nd, 2015 traders will be charged an additional commission for overnight positions on Micro, STP and ECN Islamic accounts. The commission equals to SWAP.

    Commission is charged on rollover and is displayed in the Terminal section in MT4. For ECN account the rollover commission is added to the commission for opening a trade. Current SWAPs are available in MT4 in Market Watch → Symbols → Properties.


  14. What instruments does FXOpen offer for trading?

    In Micro accounts – 28 currency pairs, gold, silver. See the full list of instruments for Micro accounts.

    In STPPAMM STP and ECNPAMM ECN - 50 currency pairs, gold and silver. See the full list of the instruments for STP and ECN accounts respectively.

    In  accounts – 50 currency pairs, gold and silver. See the full list of instruments for  accounts.

    In Crypto account – crypto pairs. See the full list of crypto pairs.


  15. What is a pip?

    1 pip (point) – is the smallest change in currency quotations, no matter in what direction a change occurs, up or down. For example, the exchange rate for EUR/USD has changed from 1.3614 to 1.3617, i.e. by 3 points. A pip is equal to 0.0001 for the nine major currency pairs. For pairs, where the Japanese yen (JPY) is the quote currency, 1 pip is equal to 0.01.


  16. What is Margin?

    Margin – the amount of cash or other Eligible Collateral that FXOpen requires a customer to deposit or maintain in the Customer's Account in connection with the Customer's trading activity. Margin is usually 1-2% of the transaction amount; the remaining 98-99% is given by the dealer. This is the leverage in Forex terms. For example, if you would like to buy $10,000 for JPY and your leverage is 1:10, you need to pay 1,000 JPY.

    The system performs an automatic pre-deal check for Margin availability, and will only execute the deal if the client has sufficient Margin funds in his or her account. To calculate the Margin it is required to open a trade, you can use the following formula:


    Example 1. Leverage=1:200, volume=0.1, EUR/AUD:

    EUR/USD (Market price is 1.3843/45).

    Long Short

    Example 2. Leverage=1:200, volume=0.1, CHF/JPY:

    USD/CHF (Market price is 0.9883/0.9886).

    Long Short

    Example 3. Leverage=1:200, volume=0.1, USD/CHF.

    Long Short

    Example 4. Leverage=1:200, volume=0.1, NZD/USD:

    NZD/USD (Market price is 0.7502/0.7507).

    Long Short

    Calculate all the necessary parameters online!

  17. What types of accounts does FXOpen provide?

    FXOpen offers the following types of accounts: Micro, ECN, STP, Crypto and PAMM. For more information, please click here.


  18. Where can I look up SWAPs?

    On the Forex market open positions rollover is done in the form of SWAP. If your position stays open for the night or over the weekend there is a daily rollover interest rate that is either added or deducted to or from your account. It depends on the currency pair you trade and the transaction type (Buy or Sell). Opening a trade means that you borrow one currency to buy another. As we don’t know how long the trade will remain open, SWAP is added or deducted when the position is rolled over the night. We add/deduct SWAP to/from the account according to the difference between the interest rates of the currencies in the pair. If the interest rate of the currency that you buy is higher than the rate of the currency you borrow, SWAP is added to your account (positive SWAP). If the interest rate of the currency that you buy is lower than the rate of the currency you borrow, SWAP is deducted from your account (negative SWAP).

    All positions (Depending on Account Type) which are remaining open at 23:59:30 Trading Platform
    Time (Server Time) are subject to rollover.
    The SWAP is calculated and added to or deducted from the Customer’s account during the time period
    between 23:59:00 and 00:05:00. The exact time will be selected by the Company on its sole discretion.

    To look up swap rates in the MetaTrader please take these steps:

    • Right-click in the Market Watch window.
    • Select Symbols.
    • Choose the currency pair in the pop up window.
    • Click Properties on the right. You will see swap long and swap short.

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