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Contracts (FX)
FX Contracts The symbol of each FX contract is based on the two currencies. The currency on the left of the currency pair is always the base currency. Therefore, you always buy or sell the base currency against the other. For example, if you buy EUR/USD, you actually buy euro and sell the dollar for it. Vice versa, if you sell EUR/USD, you actually sell euro and purchase dollar in exchange of it. In the case of Euro vs. U.S. Dollar, let's assume the exchange rate is 1.3200. It means in order to purchase 1 unit of euro, you will have to spend or sell 1.32 U.S. dollar for it. Vice versa, if I intend to sell 1 unit of euro, I need to purchase 1.32 units of U.S. dollar for it. A contract defines the minimum amount of base currency to be purchased or sold. Usually, there are two commonly recognized terminologies: standard and mini. A standard contract means each contract is comprised of 100,000 units of base currency. For example, 1 standard contract of EUR/USD means to buy or sell 100,000 euro worth of U.S. dollar. A mini contract means each contract is comprised of 10,000 units of base currency. For example, 1 mini contract of EUR/USD means to buy or sell 10,000 euro worth of U.S. dollar. Flexible contract usually means it's up to the clients to choose the trading amount. The contract size could be 10 units of base currency or 1,000,000 units of base currency. |
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Mada Financial Corporation © 2007. All Rights Reserved *Spot metal contracts and the ability to earn interest on cash balances are available to MadaFX's MetaTrader 4 platform clients only. **Forex (FX) trading on margin carries a high level of risk and is not suitable for all investors. Forex is traded with a high degree of leverage, which can work for you as well as against you, and it is possible to loss more than you invest. You should only invest funds that you can afford to lose and do not need to support yourself or your family. You should carefully consider all risks involved with forex trading as well as your financial situation, investment objectives, and risk tolerance before investing. Forex is traded over-the-counter (OTC) and not on a regulated Exchange. Market conditions may adversely affect order execution. International Awards and Recognition 
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