Q4 - Trading Quiz 6

Following China's sporadic lockdown due to increase in coronavirus cases, the volatility in the financial market has been turbulent especially safe-havens.

Looking at the opportunity that may be present, Garret decided to open 2.7 lot BUY order on XAUUSD (Gold) with the entry price of USD1,797.80.

After a few days, China decided to ease lockdown restriction in some regions as protest erupted. This has caused XAUUSD to depreciate to USD1,710.00.

Based on the information given above, what is Garret's floating profit or loss?

XAUUSD contract size: 100

• USD23,706

• -USD23,706

• USD2,370.60

• -USD2,370.60

Hanif initiated a trade on EURUSD with 0.49 lots of SELL order with the entry price of 0.97350.

After a few days, Federal Reserve signalled that the current interest rate is appropriate to market conditions and they may slow down their pace in policy tightening.

Following the announcement, EURUSD rose to 1.03510 before rising further to 1.05410.

Based on the information above, what is Hanif's profit or loss for the first and second rise of EURUSD?

EURUSD contract size: 100,000

• First rise: USD3,018.40

  Second rise: USD3,949.40

• First rise: -USD3,018.40

  Second rise: -USD3,949.40

• First rise: USD30,184.00

  Second rise: USD39,494.00

• First rise: -USD30,184.00

  Second rise: -USD39,494.00

Recently, Federal Reserve have signalled that they may slow down their pace of monetary policy tightening as latest data showed slight deprecation in inflation.

This has caused non-US dollar currency to experienced significant volatility. Seeing this as opportunity, Manisha opened several orders:

1.7 lot BUY of GBPUSD

0.77 lot BUY of EURUSD

1.78 lot SELL of USDJPY

Based on the information above, what is the pip value for each order?

USDJPY latest exchange rate: 135.19

• GBPUSD - USD17.00

  EURUSD - USD7.70

  USDJPY - USD13.17

• GBPUSD - USD17.00

  EURUSD - USD7.70

  USDJPY - USD7.59

• GBPUSD - USD17.00

  EURUSD - USD77.00

  USDJPY - USD7.59

• GBPUSD - USD17.00

  EURUSD - USD7.70

  USDJPY - USD1,780.00

Hary is a long-term trader whereby he holds his position for several weeks.

The past few days, he has been contemplating to close his 9.78 lot of BUY EURUSD as it has been in the deep profit region for quite some time.

If we ignore the triple charge on Wednesday, what will be his swap charges on this order if it was held for 25 working days?

Swap rate:

Long: -8.54

Short: 5.82

Contract size: 100,000

• USD2,088.03

• -USD2,088.03

• USD1,422.99

• -USD1,422.99

Jane was trading on several forex pairs for the past few days after market sentiment improves.

Her current account condition are as follows:

Equity: USD 900

AUDUSD - Required margin: 150USD

USDSEK - Required margin: 600USD

USDRUB - Required margin: 800USD

Based on her broker's website, the margin call and stop out level were set at 60% and 30% respectively.

Thus, what is her margin level and the scenario that is triggered?

• Margin level: 58%

  Scenario: Margin call

• Margin level: 58%

  Scenario: Stop Out

• Margin level: 172%

  Scenario: None

• Margin level: 172%

  Scenario: Margin call

Kush was surveying several brokers as he wanted to kickstart forex trading with capital of USD100,000.

He stumbled upon a broker which offers leverage up to 1:500. However, upon further inspection, he noticed that several product's has different margin requirements:

USOIL | Margin requirement: 5%

USDSGD | Margin requirement: 20%

XAGUSD | Margin requirement: 1%

Based on the information above, what is the leverage for each of the product?

• USOIL: 1:20

  USDSGD: 1:5

  XAGUSD: 1:100

• USOIL: 1:2

  USDSGD: 1:50

  XAGUSD: 1:100

• USOIL: 1:20

  USDSGD: 1:5

  XAGUSD: 1:10

• USOIL: 1:200

  USDSGD: 1:50

  XAGUSD: 1:1000

A leverage of 1:100 allows Manisha to control USD10,000 with capital of only USD100.

Based on the statement above, where does the remaining money comes from?

• The money is borrowed from the broker.

• The money is virtual and it will be deducted after closing the trade.

• The money is sourced from a pool of liquidity in the market.

• The money is borrowed from an external bank.

Pika: I wanted to kickstart my forex trading. What kind of products should I go for?

Nasis: You should start with major pairs.

Based on the conversation above, why are beginners being recommended to start with major pairs?

• It has lower spread and high liquidity.

• It is more profitable than minor and exotic pairs.

• It is easier to anticipate the movement when compared to other pairs.

• It has lower swap and higher liquidity.

Which of the statements below is not accurate with regards to minor forex pairs?

• It has slightly higher spread when compared to major pairs.

• It is often paired with US dollar.

• It includes all the 7 major currencies except US dollar.

• It will have lower liquidity when compared to major pairs.

Duy has opened several forex orders on Monday, in anticipation for further rise in each pairs.

Fast forward to Thursday, he realized that the swap charge has tripled for all of his floating orders.

Based on the scenario above, why does forex brokers charge triple swap for orders that were held past Wednesday?

• Swap takes 2 working days to process, thus any order that was held past Wednesday will be required to take account of the weekends.

• His orders was tripled charged as all the forex orders will experience rollover every Wednesday.

• Swap charge was tripled during the mid-week as brokers will be required to submit total orders report to the compliance for evaluation.

• Swap generally follows T+3 rule which applies on every Wednesday as account of weekends and public holidays.