A CFD (Contract for Difference) is a contract between two parties. One party is described as "buyer" and the other is described as "seller".
The contract stipulates that the seller pays the buyer the difference between the current value of a certain asset and the assets value at the contract time (if it happens that the difference is negative, then the buyer is the one to pay instead of the seller).
When you choose to invest in CFDs along with it comes the word "difference" which means that you are not buying the physical asset. Instead, you are choosing to take a position on the value of the underlying asset.
Contracts for Difference are actually financial derivatives which allow traders to benefit from prices that are moving up (long positions) or moving down (short positions) via a futures contract. Therefore, the differences which occur are made through cash payments, not by delivering physical goods or securities.
This means that a trader's profit or loss results from the difference between the price an asset had when you entered a transaction and the price the same asset has when you exit the transaction. For example, if you believe that the price of Euro (EUR) will increase against the US dollar (USD), you will buy Euro and sell USD for a certain price.
But at any moment you will not be the possessor of Euro.
When you trade on leveraged capital you may open a position with a value that is significantly higher that the funds that you have invested, which only serve as the Margin.
When trading with leverage you increase your chances of potential return, but also the potential losses.
Basically, when you trade with leverage you can pay less than the full price for a trade. Thus, you can enter larger positions than you could, using only your account funds.
Leverage is expressed as a ratio, for example if your leverage is 1:3, this means that you can hold a position that is triple the value of your trading account.
Let's suppose your equity falls under the maintenance margin amount. In that case, CAPEX.com can appeal to a Margin Call or can give you a certain grace period so that you have the time to add funds to your account or to close your position.
If you did not meet the maintenance margin requirement by the end of the time frame or your account went into negative equity, the position(s) will be closed.
Its closing price will be the price available on our platform at that specific time.
To avoid a Margin Call, you should check your account's balance at all times. Make sure you have sufficient funds in your account to maintain your open positions.
Trading Hours (Market Hours) are the specific time frame in which a trading instrument can be traded.
Each instrument has its own information on the dedicated page, but you can also see the time frames directly on our trading platform.
Trading Hours are displayed in GMT (Greenwich Mean Time).
No, CAPEX.com does not charge any transaction fees or commissions.
The broker makes a profit from the difference between the BID and ASK prices, a difference that is called the bid-asked spread.
Traders cannot lose more than the funds they have in their account.
Gaps in the Markets sometimes could lead to negative account balance.
With CAPEX.com you will never lose more than the amount you risked on your trades.
When a position is left open overnight, CAPEX.com adds or subtracts a ‘swap’ fee to/ from your investing account. When you make a trade, you are effectively borrowing one currency to exchange for another.
You must therefore pay interest on the currency you are borrowing, while receiving in return interest on the currency you are holding. The amount of the financing charge will vary as it is linked to current interbank interest rates (such as LIBOR).
The charge will appear in your Account at the end of the trading day.
The formulae used to calculate the swap fee of a position are:
-MT5 platform: no. of lots*lot size*tick size*MT5 swap charge*no. of days Cosmos platform: quantity*closing price at ending session*swap charge (%)*no. days.
If you wish to close your position you can do so only during the specific instrument’s trading hours.
Even more, it might happen that some instruments are unavailable to be traded for a certain time frame, for example when market events put a restriction on price feeds.
These events might be due to illiquidity, extreme volatility, etc.
The current state of your trading account is given by the following:
Balance: deposits -- withdrawals + P&L (profit/loss) of closed positions;
Equity: balance + P&L (profit/loss) of open positions.
CFDs are linked to an underlying asset (a Future contract) that has an expiration Date.
Most of the instruments we offer, which are based on a futures contract, have a rollover date.
CFDs are rolled over to the next underlying Future contract. This is known as the Future Rollover. If there is any price difference between the two Futures, an adjustment would be Credited or Debited from the balance of your trading account
It would show up in the cosmos trading platform under the rollover adjustment and/or the MT5 trading platform as a correction transaction in your trading account statement.
If you do not want to incur the price adjustment or any implication of the Future Rollover, you can close your position(s) and/or cancel Orders before the rollover date and open a new position afterwards.
If you place a trade on the Forex market, you must keep in mind that the actual value date is two days forward.
What does that mean?
For example, if you do a deal on Thursday it will be for value Monday, if you do a deal on Friday it will be for value Tuesday, etc.
Therefore, on Wednesday, to compensate for the following weekend (as rollover is not charged then because trading is stopped on weekends) the rollover amount is tripled.
An action made by a corporation is an event that is initiated by a public company.
Usually, such an event (rights issue, stock split, takeover, etc.) can affect the shares/equities issued by the company.
Because you do not own the physical share or equity, you do not have any rights to it.
Still, when a corporate action takes place, we make sure to take every measure in order to minimise the impact on your position(s).
Thus, we apply a relevant adjustment to your account.
When you use our platform, you can access Trading Central and/or automated trading systems.
Although this is the case, we do not encourage you to use Expert Advisors (Robots) as they come with a greater risk and must not be considered a way to trade carefully.
At CAPEX.com you may open or close a position, or you may also place an order by phone 24 hours a day.
Just give a call to our Dealing Desk or contact the Customer Support Department.
Once you call us you will be asked to provide some personal information before we proceed with your request due to security purposes.
An inactivity fee of thirty (30) USD or its equivalent in the currency of the trading account will apply if there has not been any trading activity during a period of three (3) months or more.