Unlock the Secrets of Successful Trading

Fictional money needed to make any trade. By Default every trade will require 10% of the “ Notional value of Trade” . For Eg, If a Trade is initiated for USD 1000,000 ( 1 Million) then the margin needed to be available in the wallet is Minimum of 10% of USD 1000,000 = USD 100,000

Only in case of 4 Currency pairs Viz EUR/USD, GBP/USD, AUD/USD and NZD/USD ( called Direct Pairs), the margin calculation will be as under:

1. Buy/Sell 1 Million EUR (Euro) Margin required = EUR 1000,000 * EURUSD Rate * 10% = 1000,000* 1.0850*10% = USD 108,500
2. Buy/Sell 1 Million GBP ( Pound Sterling) Margin required = GBP 1000,000 * GBPUSD Rate * 10% = 1000,000* 1.2850*10% = USD 128,500
3. Buy/Sell 1 Million AUD ( Australian Dollar) Margin required = AUD 1000,000 * AUDUSD Rate * 10% = 1000,000* 0.7240*10% = USD 72,400
4. Buy/Sell 1 Million NZD ( New-Zealand Dollar) Margin required = NZD 1000,000 * NZDUSD Rate * 10% = 1000,000* 0.6650*10% = USD 66,500

For all the Other currency pairs ( Indirect Pairs) , margin calculation is as below:

• Buy/Sell 1Million USD/INR ( Indian Rupee )
  Margin required = USD 1000,000 * 10% = USD 100,000
• Buy/Sell 1 Million USD/JPY ( Japanese yen )
  Margin required = USD 1000,000 * 10% = USD 100,000

This is the value of the trade undertaken at current market levels. For eg:

If the trade was: Bought USD/INR 1 Million at 76 and say the current level is 77, then the Marked to market value of the trade is

(Sell-Buy)* USD 1000,000 = (77-76) * 1000,000= INR 1000,000

But , in the app all the calculations are with respect to Dollar so the MTM in Dollar terms is

1000,000/ 77 = USD 12,987

In case of In-Direct Pairs, the calculation of differential in rates yields the results in the other currency in the pair and to get the result in Dollars, it requires to be divided by the currency exchange rate of the pair.

Or

If Original trade was Sold EURUSD 1 Million at 1. 09 and say current level is 1.11 then the Marked to Market of the trade is

(Sell-Buy)* EUR 1000,000 = (1.1100 – 1.0900 ) * EUR 1000,000= USD 20,000

In case of Direct Pairs, the calculation of differential in rates yields the results in Dollars Only

This is the PnL of the trade booked when the initial trade is Unwound or exited or squared at current market levels. For eg:

If the trade was: Bought USD/INR 1 Million at 76 and say the exited/Unwound/Cancelled price level is 77, then the P&L of the trade is

(Sell-Buy)* USD 1000,000 = (77-76) * 1000,000= INR 1000,000

But , in the app all the calculations are with respect to Dollar so the MTM in Dollar terms is

1000,000/ 77 = USD 12,987

In case of InDirect Pairs, the calculation of differential in rates yields the results in the other currency in the pair and to get the result in Dollars, it requires to be divided by the currency exchange rate of the pair.

Or

If Original trade was Sold EURUSD 1 Million at 1. 09 and say Exited/Unwound/Cancelled level is 1.11 then the P&L of the trade is

(Sell-Buy)* EUR 1000,000 = (1.1100 – 1.0900 ) * EUR 1000,000= USD 20,000

In case of Direct Pairs, the calculation of differential in rates yields the results in Dollars Only

Used Margin = Trade Margin on all the outstanding trades, which is 10% of the Trade Volume + any Negative Marked to Market + Any loss booked on the trade.

Eg: Deal done for USD/INR 1 Million

• Trade Margin = 10% of USD 1 Million = USD 100,000
• Current MTM = negative 10,000 USD
• Pn: booked on some other trades = Loss of 5000 USD
• Used Margin = USD 100,000 + USD 10,000+ USD 5,000 = USD 115,000

But If

Eg: Deal done for USD/INR 1 Million

• Trade Margin = 10% of USD 1 Million = USD 100,000
• Current MTM = Positive 10,000 USD
• Pn: booked on some other trades = Profit of 5000 USD
• Used Margin = USD 100,000 – USD 10,000 – USD 5,000 = USD 85,000

Total Margin Wallet – Used Margin

Suppose the initial wallet was USD 1000,000

• Trade 1: Used Margin is 100,000
• Trade 2: Used Margin is USD 85,000
• Trade 3 : Used Margin is USD 50,000

Available Margin = USD 1000,000 – USD 100,000 – USD 85,000 – USD 50,000 = USD 765,000

Once any trade is Unwound, the corresponding trade margin is released and added back to the Wallet.

For Eg, If a Trade is initiated for USD 1000,000 ( 1 Million) then the Trade margin is 10% of USD 1000,000 = USD 100,000

Once this trade is exited/cancelled/unwound then this USD 100,000 is added back to the Margin Wallet.