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why do bond cfds have lower leverage than forex cfds in the UK? Replied 4 months ago - The FCA has since shifted position on this matter, they now allow up to 1:30 leverage on bond cfds. In the past, the FCA had tried to comply with ESMA regulations but on the matter of leverage on bond cfds, they disagreed with the ESMA and insisted on increasing leverage on bond cfds to 1:30 because they say it is lower risk than forex and ,ost traders use bond cfds for hedging and not for speculation.
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what is margin level in trading, when should I be worried about it? Replied 4 months ago - In some jurisdictions like the UK, Europe & Australia, the financial market regulators set the stop out level for brokers to apply to their clients' accounts.
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can I trade options on every stock? Replied 4 months ago - The answer is no! Options are instruments meant to manage risk exposure on the stock. Some stocks (like penny stocks) have little or no trading volume on the exchange so if almost nobody is trading the stock why will the exchange design an option for it? Think about it!
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Do prop firms actually copy your trades? Replied 5 months ago - There is no evidence to support the claim made by some prop firms about copying trades of those who buy their challenges. This is why I hope regulation of prop firms will come fast so that some of these claims can be subject to regulatory scrutiny. Some people will say since the prop firms do a profit split it means they copy your trades, but there is no evidence to substantiate this claim. It could be that they prop firms make the claim of copying your trades to justify why they do a profit split with you.
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Is XM broker allowed to operate in Singapore? Replied 5 months ago - XM and Octafx broker websites were blocked by the market regulatory authority in Singapore, that should explain why your friend cannot access the sites.
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is gold better than forex? Replied 5 months ago - Don't trade gold CFDs as a beginner, there are not enough strategies out there that are profitable for gold. Gold ETFs are a better way for beginners to access the gold market instead of trading CFDs. But if you have enough experience in trading, I will say trade gold futures because they are more predictable than gold CFDs.
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Why do brokers reduce your leverage when your account balance is high? Replied 5 months ago - I have pondered about this too, initially i thought the brokers were lowering the leverage to prevent high losses but on second thought i realized the brokers were doing it to protect themselves. The higher your account balance, the wider the stop loss you can set thus making you almost immune to losses, so you have an edge. I don't think the brokers like that, so they lower your leverage so that even if you win, they don't have to pay you so much profit.
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how do you count pips on gold? Replied 5 months ago - A). 1 lot of xau/usd = 100 ounces of gold B). xau/usd price is always quoted to 2 decimal places (for example 2500.05) C). xau/usd changes in sequences of 0.01 (meaning 2 decimal places) D). For a standard lot, the value of 1 pip in xau/usd is (0.01 x 100 ounces) = $1 E). If xau/usd price moves from 2500.05 to 2500.06 it has moved 0.01 or 1 pip, if it moves from 2500.05 to 2500.15 it has moved 0.10 or 10 pips. Since for a standard lot of xau/usd every pip movement is worth $1 then a 10 pip move will mean a profit or loss of $10. F). For example, if you are trading 0.05 lot size of xau/usd and the price moves 5 pips in your favour, your profit will be (0.05 lot x $1 x 5 pips) = $0.25 Summary At first glance, xau/usd pip value may not seem like a lot because for a standard lot every pip movement is worth just $1 but xau/usd price moves in bursts, covering several pips in a few minutes leading to significant damage if you are on the losing side. Hope this helps!
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should i exercise my stock options? Replied 5 months ago - Call options rarely get exercised because the extrinsic value (the premium others are willing to pay to buy the call from you) may be higher than the intrinsic value you get from exercising the call. So, it makes business sense not to exercise the call and instead sell the call and make more money.
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what is market sentiment in trading? Replied 5 months ago - Its basically the way other traders feel at the moment for example when the market is expecting an important news release (such as NFP, CPI, Interest rate decision etc.), the market sentiment will be indecisive and I usually know this because price will just be trading in a range for several hours until the news is released then you see a breakout from the range.
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do banks need brokers to trade forex? Replied 5 months ago - I don't think they do; banks have an inter-bank software they use to connect them to other banks whom they trade with.
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how many trading days in a year, does Sunday count? Replied 5 months ago - I had the same question a while back and found it depends on the year and holidays, but I usually plan around 252 trading days. I’ve been using prop firms lately, and this breakdown helped me set monthly targets. If you're checking out firms, this review of TraderScale gave me a good idea of what to expect: https://tradelytic.com/prop-firms/reviews/traderscale/.
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what is a block trade & why is it done in private? Replied 5 months ago - I think block trades have to do with the dark pool where certain futures/option contracts are not pre-disclosed to the public so that market volatility is not compromised. Block trades are usually executed for eligible investors only and the block minimum threshold usually specified by the exchange ensures that futures/options contract must have a very large volume in order to qualify for block trade execution.
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Is a EUR/USD spread of 1.4 pips too high? Replied 5 months ago - Yes, it is high; most brokers offer 1 pip.
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what is the value of a put option at expiry Replied 5 months ago - The worth of a put at expiry depends on if the put expires in the money or not. The put is only worthless if it expires out of the money.
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can i sell call option before expiry? Replied 6 months ago - Yes, you can sell option before expiry. But you must ensure the market is liquid enough, meaning there are enough buyers for the options or you are going to be stuck selling to some shit head buyer that will give you an unfair price.
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what is strike price meaning in options trading? Replied 6 months ago - Strike price is like the price at which the option contract is awakened and can be used or exercised. As long as the market value of the underlying future has not reached the strike price, the option remains dormant and out of the money.
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how exactly do regulators monitor forex brokers? Replied 6 months ago - I think the brokers are supposed to render reports on their activities to the regulators, who will then scrutinize them.
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when do futures open on sunday? Replied 6 months ago - 6 PM EST is when the futures market opens for trading every Sunday (except when the stock exchange is on market holiday or something). On Sundays you may not get good liquidity on some futures so the best futures I trade on Sundays for good liquidity are S&P 500 futures mini, crude oil futures, and gold futures.
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in the money vs out of the money options, whats the difference? Replied 6 months ago - I think "at the money" often means when strike price equals current futures market price. Ath the money is not yet a profitable contract because by the time you deduct cost of buying the contract, it collapses back into unprofitability. In the money is when the option is really in profit because current market price has already exceeded strike price so even if you deduct the premium (cost of buying the option) chances are you will be left with a profit (except the premium is very high)
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