Q4 - Trading Quiz - 1

Forex is the world's largest decentralized market where every type of investors would participate.

Based on the statement above, which type of investors and its description listed below is incorrect?

• Retail Traders - they act upon currency speculation by buying or selling forex pairs.

• Large Commercial Companies - takes part in the forex market for the purpose of doing business.

• Super Banks - largest banks in the world are able to influence exchange rate.

• Government and Central Banks - actively involved in forex market for the means of their economy.

Hanif is contemplating to trade forex.

However, there are several options in the market to do so.

Based on his research, he has come up with the following requirements:

1. Involves trading the contract.

2. Provides the "rights" to execute.

3. Not obligated to execute during expiry.

Which instrument listed below matches his requirements?

• Rolling Spot Forex

• Forex Options

• Forex Futures

• Forex ETFs

Manisha kickstarted her trading in ZFX.

Due to her work schedule, she only have small amount of time per day to monitor the market and execute her trade if there is an opportunity.

Based on her trade history, she likes to trade GBP and CHF.

From her scenario above, which trading session would you recommend her to trade?

There may be two possible answer. Choose one of the either.

• Tokyo Session

• Australia Session

• London Session

• New York Session

Which of the following is not a "feature" of Rolling Spot Forex?

• Allow investors to gain exposure to forex market with managed funds.

• Done via Over-the-Counter (OTC).

• Allow trading the instrument without owning the asset.

• Commonly known as Contract for Difference.

Peter wanted to kickstart his forex trading journey to earn some side income.

However, he stumbled upon some difficulties in understanding how Contract for Difference (CFD) works.

From all the explanation listed below, which statement is true with regards to CFD?

• CFD enables the trader to trade on price movement and earn profit from price appreciation or depreciation.

• CFD enables trader to gain exposure by owning the underlying asset.

• CFD only permits the trader to earn profit through price appreciation.

• CFD is a standardized contract that obligates the trader to execute it during expiry.

Which statement listed below best describes margin?

• Sum of money temporarily deposited to open and keep the position afloat.

• Sum of money available to open new positions.

• The level of margin by dividing equity with used margin.

• The level of margin which will trigger Stop Out.

Garret placed several orders with FBX for the past several days.

Earlier this morning, he receives a notification to deposit more funds into his account to avoid Stop Out.

The following is his account details:

Equity: $15,380

Used margin: $26,000

Based on the information above, what is the possible margin call level for FBX?

(Round up to the nearest decimal)

• 60%

• 170%

• 6%

• 17.9%

Kush has been trading gold for the past few weeks due to its volatility.

Earlier today, Federal Reserve announced hawkish signal to the market which triggered massive movement on gold price.

Due to this, Kush's account suffered from Stop Out as his capital can no longer sustain the large price movement.

An account snapshot shows the following information:

Equity: $7,500

Used margin: $25,000

From the information above, what is the Stop Out level for the broker he had used?

• 30%

• 300%

• 3%

• 0.3%

Which of the statement below is false with regards to margin level?

• The higher the percentage, the more funds you have to open a new position.

• It is calculated by dividing equity with used margin.

• Provides an overview on how many new trades you can open with the current account condition.

• Margin level is the sum of used margin that can be used to open new positions.

Pikaa is an avid day trader. She focuses on several forex pairs throughout the day based on recent market movement and news.

Information below is her account details:

EURUSD - Used margin: $250

USDJPY - Used margin: $200

GBPUSD - Used margin: $300

Equity: $2,000

From the information above, what is her current margin level?

• 266%

• 2.66%

• 37.5%

• 0.375%