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Traders Handbook

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Account Statements

Account statements are available for printing on-line at any time.

Calculating Profit and Loss

Prof i t and Loss (P&L) for every position is done in “real time” on the trading system. This enables customers to view the P&L in their account instantaneously as the market moves.

Approximate USD values for a one (1) “pip” move per contract in our traded currency pairs per 10,000 units of the base currency are as follows:

EUR/USD
Pip value = .0001
$ value of 1 pip = $10,000 x .0001 = USD $1

USD/CHF
Pip value = .0001
$ value of 1 pip = $10,000 x .0001 ÷ Spot Price of CHF (1.4825) = Approx USD 67¢

GBP/USD
Pip value = .0001
$ value of 1 pip = $10,000 x .0001 = USD $1

USD/JPY
Pip value = .01
$ value of 1 pip = 10,000 x .01 ÷ Spot Price of Yen (116.82) = Approx USD 86¢

USD/CAD
Pip value = .0001
$ value of 1 pip = 10,000 x .0001 ÷ Spot Price of CAD (1.5340) = Approx USD 65¢

AUD/USD
Pip value = .0001
$ value of 1 pip = 10,000 x .0001 = USD $1

EUR/JPY
Pip value = .01
Value of 1 pip = 10,000 x Spot Price of Euro (.9815) x .01 ÷ Spot Price of Yen (116.82) = Approx USD 84¢

GBP/JPY
Pip value = .01
Value of 1 pip = 10,000 x Spot Price of GBP (1.5744) x .01 ÷ Spot Price of Yen (119.91) = Approx USD $1.31

NZD/USD
Pip value = .0001
$ Value of 1 pip = 10,000 x .0001= USD$1

Currency Pairs

Commerce Bank and Trust (“CBFX”) offers trading in the following currency pairs:
EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD,
AUD/USD, EUR/GBP, EUR/JPY, GBP/JPY and EUR/CHF

FDIC Insured Funds

All deposits are made to and held by the Commerce Bank and Trust (Massachusetts, USA) and not Informforex. All deposits are FDIC insured.

Fees and Schedules

The Commerce Bank does charge the following fees which are deducted from any expedited funds:

Incoming National or International Wire Transfer: No charge
Outgoing National or International Wire Transfer in USD – $15
Returned checks -$25

To deposit or withdraw funds at any time, fill out and sign the appropriate form. In order to withdraw funds, all open positions must be closed. Requests to withdraw the funds will be processed within two business days.

Deposit Instructions

Withdrawal Form

For any additional information, please call the Commerce Bank at +1 617 357 0688

Interest on Deposits

Accounts with $500,000 or more in deposits earn the daily inter-bank interest rate .

Leverage

CBFX enables foreign exchange margin currency trading to be conducted at a maximum leverage of 100:1. Clients who wish to trade at a reduced leverage may do so and this will be programmed and set on their individual trading platform.

The equity in an account is the value of the funds in the account adjusted for floating positions. One lot has an approximate market value of 10,000 units of the base currency. A requirement of $100 in equity per open lot is equal to the maximum leverage of 100:1. The Dealing Desk constantly monitors the leverage levels of all accounts. CBFX does not attempt to contact clients whose accounts are near the minimum equity requirement for their open positions. Clients are fully responsible for monitoring the activity in their accounts.

In the event that an account exceeds its maximum allowable leverage, CBFX has the right to and will immediately close all open positions in the account. This closing of all open positions will occur regardless of the size or the nature of the open positions held in the account.

Margin Requirements / Margin Calls

Initial Margin Requirements: A minimum of 1% on all accounts.

Margin Calls: Margin calls only occur if the remaining equity goes below the initial margin requirement. In a margin call, all open trades are automatically closed regardless of the size of the trades or the number of open positions.

Order Confirmation

Deals are confirmed on screen, typically within one second. Full transaction details may be accessed on screen as well, including date, time, rate, amount bought or sold, USD value and reference number.

Order Types

The CBFX trading platform supports all standard order types as well as providing sophisticated order entry and tracking. Orders may be entered at any rate inside or outside the existing spread, using the following order types:

Market Order

Market order is an order to buy or sell any specific currency, which is to be filled immediately at the current exchange rate quoted on screen. From the “Dealer’s Rates” window, click on the currency pair you wish to trade, then select the transaction size. You can then click “OK” to confirm. If CBFX is unable to fill the order at the specified rate, CBFX will send the client a new price representing the current market rate.

The dealing desk responds to market orders in less than 10 seconds during normal market conditions. During heavier market conditions, market orders are processed in less than thirty seconds.

Entry Orders

An entry order is an order that is executed when a predetermined price level is reached and/or broken. The executions of these orders are under the supervision of the dealing desk and remain in effect until the client cancels the existing order.

Limit and Stop Orders

Orders can be placed to close a position on a stop or limit, as well as to initiate a position on a stop or limit. To initiate a position with a stop or a limit, right click on the currency bid or ask in the “Dealer’s Rates” window and select “Stop” or “Limit”. You can then input your price.

OCO Orders

One Cancels the Other. Simultaneous orders are placed to take advantage of price movement, which consists of both a Stop and a Limit order. The order that is first hit (either Stop or Limit) is executed and the remaining order is instantly cancelled

Close Position

To close an open position at the market, or with a stop or limit, right click on the position in the “Open Positions” window and select “Stop”, “Limit”, or “Close Position.”

Phone Trading

Call the trading desk at + 1 617 357 0688 to speak with a dealer. State your name, account number, user ID and password. Ask for a price in the desired currency pair, indicating the amount you wish to trade.

Example: “May I have price for Euro, sell, 10 lots?”

After the dealer gives you a quote, you should immediately indicate whether you accept it because the quote will expire if and when the dealer says “CHANGE” or “OFF”:

You must indicate to the dealer whether you are opening a new position or closing an existing one. If it is to close a position, the dealer might ask you to indicate the opening price of the position that you wish to close.

Example: “May I have a price for Buy 10 Euro, opening position.”

Example: “Sell 5 Dollar Swiss, closing position of a long position at an open price of 1.6982.”

If you do not wish to trade at a particular quote that you have just received from our dealer, simply say “nothing there” or “re-price”, at which point you may decide to deal or pass entirely on the dealer quote or re-quote

After you execute your trade, the dealer will confirm your trade details to you.

If it is correct, confirm with the dealer and hang up. You have now finished your phone trade. In the next few minutes, the dealer will input your phone trade on your on-line trading platform. You must then check that you phone trade was inputted correctly into your account on the on-line trading platform.

An Example of a Phone Trade:

Customer: Hi this is customer ABC, account number 123, user ID XYZ and password QRS.

Dealer: Hi ABC, how may I help you? (After confirming the identity of the customer)

Customer: Can I have a price for 3 Euro?

Dealer: Price for 3 Euro is currently .8710/15

Customer: I Buy 3 Euro, opening position.

Dealer: To confirm, you bought 3 Euro at .8715, opening position for account number 123.

Customer: All agreed.

Dealer: Thank you.

End Call

Price Quotes

Through the CBFX platform, customers can execute trades directly from real time streaming bid/ask quotes. Live prices are continuously updated through Java-enabled dealing software and traders can click on the current bid or ask prices at any time to instantaneously execute trades.

Reporting

The dealing software tracks all trading activity in real time, allowing clients to view current open positions, real-time profit and loss, margin availability, account balances, and all historical transaction details directly on-screen.

Rollover Interest

At 5:00 PM Eastern Standard Time, all open positions are automatically rolled-over and interest is applied. Interest charges are determined by the difference between US interest rates and the interest rates in the corresponding country.

CBFX overnight rollover charges:

- Accounts with 200:1 leverage are charged interest the rollover interest as indicated in the Currency Reference Rates on the trading platform..
- Accounts with 50:1 leverage either receive or pay the interest rate differential (swap points) depending on whether they sell or buy currencies that have a higher interest rate than the US rates. This is also indicated in the Currency Reference Rates on the trading platform..

All of the inter-bank foreign exchange trades settle between banks in two business days. The roll-over interest is paid on a daily basis depending on the day of the week.

Monday – 1 day of interest: Trades executed on Monday would settle on Wednesday. In other words, all of the inter-bank trades have 2-days value date. The roll-over takes place when a position that has been opened on Monday was held overnight and rolled to Tuesday. In this case the next value day for this trade will be that of Thursday.

Tuesday – 1 day of interest: If a position was opened on Tuesday and rolled-over to Wednesday then the value date would be that of Friday.

Wednesday – 3 days of interest: All of the positions that were opened and held overnight on Wednesday and were rolled overnight to Thursday would have the value date of the following Monday. On Wednesday, interest is charged for Monday, meaning an extra two days of interest for the weekend when banks are not open and actual delivery of currency cannot be made.

Thursday – 1 day of interest: All of the positions that are rolled to Friday will have only one-day interest. The weekend interest was charged on Wednesday.

Friday – 1 day of interest: A position that is rolled to Monday will have a value day of the following Wednesday.

In the event a country of one of the currency pairs has a holiday, then the value day will be adjusted accordingly. Every foreign exchange deal has a value day and if the position is not closed on the same day, then it becomes subject to rollover.

Trading Hours

CBFX dealing desk is open 24 hours daily from 6:00 PM EST Sundays through 4:30 PM EST Fridays.

Trading Minimums

A minimum transaction size is 1 lot, or 10,000 of the base currency. An account with a leverage of 50:1 opening a US$10,000 position would require an initial margin deposit of US$200.

Trading over the Internet

Executing a trade over the Internet is a simple two-step process. Simply enter the number of lots and then click on the bid (buy) or offer (sell) for the currency pair you wish to trade and your trade is automatically executed. Our dealing software automatically calculates the initial margin requirement based upon the amount of the trade. If sufficient funds are available in your account the software will accept the transaction. Trades are confirmed online, normally within one second. At the same time, the system instantaneously updates both your open position and calculates your current P&L .

Trading Spreads

Prices quoted are inclusive of our normal dealing spreads, however, during high market volatility and times when major economic news is released, spreads may widen.

Transaction sizes

All trades are sized in units of 10,000 of the base currency, (ie. GBP/USD is £10,000). All of the trades are numbered in terms of ‘lots’. The maximum trade size available online is 500 lots or 5 million of the base currency. Trades in excess of 500 lots must be executed over the phone with one of the CBFX dealers.

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