Increment movements

[123mike]

Hi! I don't understand how the increments are applied, can someone give me some examples using 100 Contracts in AUD/USD please?

[AshishIG]

4 hours ago, 123mike said:

Hi! I don't understand how the increments are applied, can someone give me some examples using 100 Contracts in AUD/USD please?

Hi @123mike, are you referring to the Margin increments?

Regards,
AshishIG

[123mike]

Yes I think so, it happens in the STOP LOSS area.

[AshishIG]

1 hour ago, 123mike said:

Yes I think so, it happens in the STOP LOSS area.

When a client has a sufficiently large size they wish to trade, that would mean there is a greater risk to the client.

Therefore, in order to alleviate some of the risks, we margin large-sized trades in tiers. The margin tiers can be found on the ‘i’ tab on the deal ticket:

Tiers work on an excess basis. This means that you fill each tier's position size before entering the next tier. 

For example, using the margin tiers above, if you wish to trade a position size of 100 on AUD/USD, the first 65 contracts would be margined at 0.5% and the remaining 35 would be margined at 1%. These would then be tallied to produce the margin requirement for the trade. 
If the base currency on the account does not match the currency of the margin tiers, a conversion is required. 

Calculations:

Margin = Size x contract size per point x price x margin/Deposit factor

Tier 1 Margin
65 x $100 x 65.70 x 0.5% = $2,135.25 
Tier 2 Margin
$35 x $100 x 65.70 x 1% = $2,299.5 
Total Margin
$2,135.25 + $2,299.5 = $4434.75

Total margin converted back to base currency (A$ for example)
$4434.75 ÷ 0.66(current rate- 1USD=0.66AUD) = A$ 6719.3182   

Hope this gives you an idea of how the Margin increment works. If you still got questions, feel free to ask.

All the best,
AshishIG

[123mike]

Thanks very much I understand it a lot better now, I'm still on the DEMO trying to figure it out before I jump into the deep end of the pool.