1. Normal Forex Trade (Selling EUR/USD):

Trade all our Forex contracts commission-free. You can open a new position at just 1% of the contract value.

The only charge is our dealing spread: for most major FX pairs this starts from just 1 or 2 pips, for a full or mini contract. All our contract sizes are set out in the Contract Details.

Opening the position
It is 29 July 2008 and you decide to go short of the euro against the dollar. Our quote is 1.5742/1.5744, and you sell 5 contracts (the equivalent of E500,000) at 1.5742.

The value of your position is E500,000 x 1.5742 = $787,100. To open the position you supply a deposit of just 1% of the position. Your deposit is therefore 1% x $787,100 = $7871. Please be aware, however, that CFDs are a leveraged product and that it is possible to lose more than your initial deposit

Interest adjustments
While the position remains open, your account is debited or credited to the current Tom-Next rate. Tom/Next expresses in pips the difference between the interest paid to borrow the currency that is being notionally sold overnight, and the interest received from holding the currency that is being notionally bought overnight. An administrative charge of no more than 0.3% per annum applies on either side of the current Tom/Next spread. This maximum charge will apply to both regular and mini-contracts.

Closing the position
Nearly two weeks later on 11 August, EUR/USD has fallen to 1.4976/1.4978, and you take your profit by buying 5 contracts at 1.4978. Your profit on the trade is calculated as follows:

2. Normal Forex Trade (Limited Risk Trading / Guaranteed Stop Trade):

When you trade an FX contract with Limited Risk, you place a Guaranteed Stop and we guarantee to close your position at exactly your chosen level should the market move against you.

For Limited Risk trades a charge is added to your opening price, in effect an insurance premium for risk protection. The Limited Risk premium for a major FX pair is fixed at just 3 pips. All contract sizes are set out in the Contract Details.

The margin requirement for a Limited Risk FX trade is equal to the amount which would be lost if the Stop were triggered, although you may also be asked to cover interest adjustments.

Buying GBP/USD with Limited Risk
You think sterling is set to rise against the dollar, but you don't want to be caught by a sudden market move. Opening the position

It is 12 August 2008 and our quote is 1.8996/1.8999. You decide to buy 1 contract (the equivalent of £100,000) on a Limited Risk basis. So your position is opened at 1.8999 (the offer price) plus 3 (the Limited Risk premium) = 1.9002.

Placing the Guaranteed Stop
You decide to put your Guaranteed Stop at 1.8978. So the most you can lose on the position (excluding interest adjustments) is:



Interest adjustments
Interest adjustments are applied to Limited Risk positions in exactly the same way as to our standard FX positions.

Closing the position
Later in the day GBP/USD has risen to 1.9017, but you fear falls will follow during the remainder of the day. You close your position by selling one contract at 1.9017, the bid price. Your predictions are proved correct and sterling falls in the evening. However, with your stop in place, your loss would have been limited to $240.

Your profit on the trade is calculated as follows: