1. Where can I find the Legal Terms & Conditions of FXinvesting?

You can read the Legal Terms & Conditions of our company following this link: https://fxinvesting.com/terms-and-conditions/

2. What is a Spread?

A spread is a difference between the current price at which we can buy an asset (ASK) and the price at which we can sell an asset (BID).

For example, the current quote for currency pair EUR/USD is Ask=1,39801, Bid=1,39789. In this case spread is 12 points, since the price differs by 0,00012$. Spread is also a commission that broker takes for opening a position in Forex market. If we’re talking about the market spread, you should consider that it is widening due to some financial news and increasing market activity. It means the faster the market price is changing, the wider a spread will be.

3. What is a Point?

A point is a minimal price correlation. For example, if the quotes on Forex market are given by the fifth character after comma, the minimum price correlation can be 0,00001.

For example: the price of EUR/USD was 1,08195, after that the price dropped by 15 points (0,00015). The price of one Euro will already be 1,08180 by this movement.

4. What is a Swap?

A swap is a derivative in which two counterparties exchange cash flows of one party’s financial instrument for those of the other party’s financial instrument. It is a commission charged from or added to a trader’s account for transferring currency pairs open positions on the next day.

5. What is a Leverage?

A Leverage is a technique involving the use of borrowed funds in the purchase of an asset, with the expectation that the after tax income from the asset and asset price appreciation will exceed the borrowing cost. A collateral that the holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty is a Margin. The leverage amount is set by a brokerage company and in fact determines the correlation between amount of guarantee and a borrowed capital: 1:2, 1:4, 1:10, 1:20, 1:50, 1:100, 1:200, 1:500. So if a client has $500 on his/her account, the leverage of 1:200 (where “1” is an amount of own capital and “200” is an amount of a leverage) means that a trader could operate with a capital of $100 000.

6. What is a Lot?

A lot is a minimal amount of product we can buy or sell. All the requests on the financial markets are put in lots. It’s important to understand that the amount of one lot depends on an instrument. For example, one lot of Gazprom stocks contains 100 stocks at the same time, which means that requesting the purchase of one lot you’re actually buying 100 stocks. The standard lot on Forex market is usually 100 000 units of a basic currency. So if you’re buying 1,5 lots of EUR/USD currency pair, you’re opening a position for 150 000 Euro.

7. What is a Stop-out?

A Stop-out is a specific point at which all of a trader’s active positions in the foreign exchange market are closed forcibly by their broker because of a decrease in their margin to levels, meaning they can no longer support the open positions. In most cases stop-out appears when the level of provision is 50%, which means that a funds amount of a client is twice as lower as a needed margin. For example, the required margin for a current opened position is $200 and a trader has $800 on his/her account. As you can see, the level of provision is 400% so a broker doesn’t close the position. The price of an instrument starts moving against the client’s prediction and his/her loss is $700. Since the amount of funds of $100 isn’t enough to cover a margin of $200 (the provision level is 50%), a broker closes the position forcibly.

8. What is a Swap Level?

A swap level is a minimum distance in points to the current market price. It’s impossible to set a pending order or a stop-order closer than this.

9. What is a Freeze Level?

A freeze level is the range between the current market price and the trade’s price you try to place (pending order). It’s the minimum distance in pips, measured from the current spot price (Bid/Ask), to be attained to trigger a temporary ban on modifying, deleting or closing the orders, which are near to execution.