Q4 - Trading Quiz - 4

"Leverage is a double edged sword"

Which explanation below best describe the statement above?

• Leverage allows you to control large sum of money with small amount of capital from our own.

• With $100 and 1:200 leverage, it amplifies our profit and loss capability by 200x.

• With $100 and 1:200 leverage, it enables to control position up to 200x larger.

• As leverage increases, the amount of margin required when opening a position decreases.

Manisha traded on some pairs for the past few days.

However, one of the pair has the following characteristics:

1. Spread is very high.

2. Liquidity was rather low with difficulty in opening or closing the position.

3. Involves a currency from the emerging markets.

Based on the description above, which currency pair below best describes it?

• EURJPY

• AUDCAD

• GBPUSD

• USDRUB

Garret placed a buy (long) order on EURUSD.

He holds the position for 3 working days and closed it prior to an upcoming European Central Bank policy meeting to avoid volatility.

Based on data from MetaTrader 4, below is the swap rates.

Swap long: 1.41

Swap short: -0.57

If the pip value for his order is USD10, what is the expected swap charges on this order?

• USD4.23

• -USD4.23

• USD1.71

• -USD1.71

Pikaa has several positions in her account that are still floating.

In order to assess her account's risk factor, she requires to perform manual calculation on her position's margin. Below is her account's status:

EURUSD - Required margin: 2%

GBPUSD - Required margin: 3%

GBPJPY - Required margin: 7%

Assuming all her position size is USD10,000, what is her margin level if her equity currently stands at USD1,500?

• 125%

• 12.5%

• 1.25%

• 1250%

Duy is investigating on a foul play from his broker after his account received Stop Out notification moments ago. The data below is his account's status following the Stop Out:

AUDUSD - Used margin: USD600

GBPJPY - Used margin: USD1,000

USDJPY - Used margin: USD800

GBPUSD - Used margin: USD400

Equity - USD 1,500

If the broker specifies that the margin call level and stop out level is at 100% and 60% respectively, what is his margin level based on the data that is provided above?

• 0.5357%

• 53.57%

• 1.86%

• 186.67%

Hassan has several floating orders that he has opened for the past week.

Following the announcement of Federal Reserve's meeting minutes, the market undergoes high volatility which led to majority of his orders to incur losses. Below is the data from his account:

GBPUSD - Used margin: USD500

EURUSD - Used margin: USD400

XAUUSD - Used margin: USD300

AUDJPY - Used margin: USD800

Equity: USD800

If the broker specifies margin call level and stop out level at 100% and 50% respectively, which scenario will his account trigger and what is his margin level?

• None.

  Margin level: 250%

• Margin call.

  Margin level: 100%

• Stop Out.

  Margin level: 40%

• Stop Out.

  Margin level: 25%

Recently, Malaysia undergoes political turmoil due to hung parliament election result.

Due to this, several orders of Hanif on USDMYR suffered from severe losses which led to a Stop Out.

If the broker's Stop Out level is at 20% and his Used Margin is USD4575, what is his possible equity amount?

• USD915

• USD22,875

• USD9150

• USD2287

Momen placed a SELL order on XAUUSD which have the pip value of $100.

Following the announcement of US ADP Nonfarm Payrolls data, his order has generated significant amount of profit.

Due to this he decided to close the order the next day.

The swap fee for XAUUSD are as follows:

Swap long: -7.55

Swap short: 9.18

If the order was closed past Wednesday (which warrants for a triple charge in swap), what is his swap charge for this order?

• USD91.90

• USD275.40

• -USD75.50

• -USD226.50

Gold has the chemical element of AU is one of the world's precious metal that has investment value.

Which statement below best explains the investment property of gold?

• It has good store of value due to its scarcity and it cannot be printed.

• It has safe-haven properties although that status diminishes due to a change in investor's sentiment.

• It is a highly sort after commodity which is commonly used in the production of green vehicles.

• It is a popular commodity which is commonly used in industrial sector mainly during the winter season.

Lie Suen was contemplating to invest into a broker due to its high leverage of 1:2000.

However, upon reading through their contract specification, she found that each products has different margin requirements which reflects to differences in leverage offered.

Below are the data from the broker:

XAUUSD - Required margin: 5%

CADJPY - Required margin: 10%

BTCUSD - Required margin: 50%

Based on the data above, what is the leverage offered for each products?

• XAUUSD - 1:20

  CADJPY - 1:10

  BTCUSD - 1:2

• XAUUSD - 1:2

  CADJPY - 1:1

  BTCUSD - 1:0.2

• XAUUSD - 1:2

  CADJPY - 1:10

  BTCUSD - 1:2

• XAUUSD - 1:20

  CADJPY - 1:10

  BTCUSD - 1:0.2