Jump to content

Confused with base currency exhange


Guest SomeoneToldMe

Recommended Posts

Guest SomeoneToldMe

Hello long term index trader (on other platforms) new to FX. 

My base currency is SEK but I have so far only played around with EURUSD in a demo account trying to learn the FX profession. 

How is the exchange rate determined from SEK to EUR when I enter a trade? Is it per tick intraday? Does this mean a gamble on EURUSD is as much a gamble on SEKEUR? Is this exhange taken into account in the demo account or will the fee for exchanging SEK to EUR be a nasty surprise once I go live? 

Or am I overthinking this? 

Link to comment
  • 1 month later...
  • 2 weeks later...

The answer to your question is that there will not be a nasty surprise. You will lose only 0.3% on the P/L transfer to SEK at the END of the trade. So that is only a tiny bite out of the exact profit or loss, not on the underlying. You are likely already paying this on your demo account, but it was too small to detect.

The exact details depend upon whether you have a CFD or spread betting account. In your case (I am guessing) of a euro-denominated spread bet on EUR/USD making EUR 100 profit/loss, you will receive EUR 99.70 / pay EUR 100.30 worth of SEK. It doesn't matter that the underlying may be EUR 100,000, that doesn't enter into the calculation.

Your demo account is identical to a live account intra-day. (But it doesn't reflect overnight finance charges, where the 0.3% currency conversion charge to SEK, though still there, will be lost in the rounding error.)

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      23,646
    • Total Posts
      97,090
    • Total Members
      44,202
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    DrIngNucelar
    Joined 07/12/23 08:57
  • Posts

    • @espiral, A higher broker margin requires a high margin which needs to be transferred to the client which would make offering this stock expensive for our retail clients. Thanks, KoketsoIG
    • I do not understand it.  What is the difference between this stock and other Toronto stocks with much less market cap that are available with leverage in this market?
    • Dear @espiral, Thank you for your response. Please note that we cannot offer this stock on leveraged accounts and it is only available for non-leveraged accounts. This is because of the higher broker margin which would need to be transferred to the clients. Thanks, KoketsoIG
×
×
  • Create New...
us