Essential elements related to FX CFD trading

1. Foreign exchange CFD trading is a form of cash-settled, difference contract that allows for exposure to exchange rate fluctuations but does not result in the physical delivery of the underlying currency.

2. The standard trading hours for most currency pairs are Sunday 22:00 (GMT) to Friday 22:00 (GMT), generally offering 24-hour trading with no interruption. Some emerging market currency pairs may have unique hours.

3. The minimum quantity to trade Forex CFD with uSMART is 1,000, with minimum increment of 1,000 of the currency pair's base currency.

4. For foreign exchange CFD trading, margin and unrealized profit or loss are calculated in the quoted currency of the currency pair, but at the time of closing a position, any realized profit or loss will be automatically converted to the base currency (USD) and a currency conversion fee will be charged. Additionally, a fee for converting to USD at the time of settlement will also be applied.

5. CFD trading supports "netting off", which means that it is possible to take an opposing position, for example: If a trader originally holds a long position of 5 lots, they can sell 15 lots of the contract if they have enough margin. This would effectively close their original position and take an opposite position at the same time.

 

What are the benefits of FX CFDs trading?

1. Go long or short

Take advantage of different price movements.

2. Flexible trading hours

Forex market is active 24 hours during the week.

3. High leverage

Increase potential gains with less capital up front.

4. Constant opportunities

The Forex market is a large and global with wide range of FX pairs.

 

What’s the difference between FX and CFDs?

FX is one of the many markets you can trade with us. When trading FX, you’re speculating on the value of one currency against another – for example, EUR vs USD.

CFDs – short for contracts for difference – is one of the methods you can use to get exposure to forex with us. When trading with a CFD account, you don’t take ownership of physical currencies. Instead, you’ll use the derivative to anticipate on price movements.

 

FX CFD Available order type

1. Market order

2. Limit order

 

FX CFD Margin and charges

1. Spread

Currency pair	Minimum spread
EUR/NOK	36.8
EUR/SEK	18.5
USD/DKK	12.7
USD/NOK	22.1
USD/SEK	8.9
CHF/JPY	2.2
EUR/CAD	3.4
GBP/CHF	3.2
GBP/JPY	2
USD/HKD	4.9
USD/SGD	4.3
USD/ZAR	58.8
AUD/USD	0.5
EUR/CHF	2.1
EUR/GBP	1.1
EUR/JPY	1.1
EUR/USD	0.5
GBP/USD	1.1
USD/CAD	1.5
USD/CHF	1.5
USD/JPY	0.7
USD/CZK	192.01
USD/HUF	8.1
USD/ILS	40.1
USD/MXN	118.1
USD/PLN	14.1
USD/TRY	290.9
USD/CNH	19.3
AUD/CAD	3.2
AUD/JPY	1.2
AUD/NZD	1.6
EUR/AUD	2.8
GBP/AUD	2.8
NZD/CAD	3.9
NZD/USD	1.1

 

2. Overnight fee

It is a fee whereby you are required to pay to keep your CFD FX position open beyond 10 p.m. UK time, while this may vary for local and global. uSMART will adjust your account's interest rate to reflect the cost of funding your position.

 

How do we calculate overnight fee?

We take tom-next rate from the underlying market + 0.5%.

**Tom-next rate is a short-term forex transaction that enables traders to simultaneously buy and sell a currency over two business days. It is to prevent traders from having to take physical delivery of currency, while keeping their forex positions open overnight.

 

3. Currency conversion charge

CFD FX account base currency is default as USD. When trading in a currency other than the base currency, uSMART will convert the foreign-currency profit/loss, commission or any other charges incurred to the base currency automatically. Our currency conversion charge is 0.5%.

 

4. FX CFD margin requirement

You may refer to the margin requirement reflected on our mobile application for each currency pair. 

 

How to trade FX CFDs on uSMART app?

Step 1: Open CFD account and your account.

Step 2: Choose your preferred currency pair.

*You’d buy the pair if you expected the base currency to rise in value against the quote currency. Or, you’d sell if you expected it to do the opposite.

Step 3: Place a CFD order.

Step 4: Monitor your position.

 

How to withdraw funds from FX CFD account?

Once you have closed your position, the sales proceed will be automatically credited into your securities account after one working day. You do not need to manually submit fund withdrawal request to withdraw the funds from the FX CFD account.

 

Reading about the risks of FX CFDs

CFD trading may not be suitable for investors with low risk tolerance level due to low industry regulations, potential lack of liquidity and the need to always maintain an adequate margin from leveraged losses.

Losing more than your deposits and making further payments may be a possibility. If the position moves against you by a certain percentage, you may lose more than your deposit.

The type of position, and the duration of you holding the positions, you may incur holding costs.

Due to the fact you need to maintain certain margin requirements, you need to always have sufficient funds in your account. Failure to do so may led to your position in being closed. You need to take account of market volatility and price sensitive news which may affect your account balance.

Please note that you will need to acknowledge the Client Agreement and the Risk Fact Sheet for CFD before you are allowed to trade in CFDs.

 

FX CFD Frequently Asked Questions

1. What is FX CFD?

Forex stands for Foreign Exchange, which refers to the trading of currencies of different countries. Forex CFD is an alternative means of trading on forex currency pairs, allowing you to anticipate on the movement of the underlying instrument without owning the underlying currency.

Rather than settling (or delivering) a set amount of base currency, CFDs are cash-settled, based on the difference between the opening and closing prices of a pair of currencies.

 

2. What’s the difference between FX and CFDs?

FX is one of the many markets you can trade with us. When trading FX, you’re speculating on the value of one currency against another – for example, EUR vs USD.

CFDs – short for contracts for difference – is one of the methods you can use to get exposure to forex with us. When trading with a CFD account, you don’t take ownership of physical currencies. Instead, you’ll use the derivative to anticipate on price movements.

 

3. What are the benefits of FX CFDs trading?

- Go long or short.

Take advantage of different price movements

- Flexible trading hours

Forex market is active 24 hours during the week.

- High leverage

Increase potential gains with less capital up front.

- Constant opportunities

The Forex market is a large and global with wide range of FX pairs.

 

4. What is auto-balancing of funds between securities and CFD account?

As FX CFD is a high-risk investment due to low industry regulations and potential lack of liquidity, clients are required to maintain an adequate margin from leveraged losses. It is to buffer for any potential loss if the market moves against the position. The risk level and purchasing power of securities and CFD accounts are combined. Therefore, the system will automatically transfer funds between both accounts to maintain the risk level as long as there is sufficient fund in the securities account.

You may refer to the table below for more details:

Scenario	Description
New CFD position has been opened.	System will automatically transfer fund from securities account to CFD account for the CFD position’s initial margin requirement if there is insufficient fund in the CFD account.
Closure of CFD position	System will automatically transfer excess fund from CFD back to securities account upon closure of CFD position.
When CFD account Initial Margin / Net Equity is equal or greater than 105%	System will monitor and automatically transfer fund from securities account to CFD account if CFD account initial margin divided by net equity is equal or greater than 105%.
Daily account cash rebalancing	System will automatically transfer fund as required between security and CFD accounts to maintain CFD account’s Initial Margin divided by Net Equity = 1 at the end of each trading day. Any excess equity in CFD account will be transferred back to securities account while fund will be transferred to CFD account from securities account if CFD equity is insufficient.

 

5. How to withdraw funds from FX CFD account?

Once you have closed your position, the sales proceed will be automatically credited into your securities account after one working day. You do not need to manually submit fund withdrawal request to withdraw the funds from the FX CFD account.

 

6. Essential elements related to FX CFD trading.

- Foreign exchange CFD trading is a form of cash-settled, difference contract that allows for exposure to exchange rate fluctuations but does not result in the physical delivery of the underlying currency.

- The standard trading hours for most currency pairs are Sunday 22:00 (GMT) to Friday 22:00 (GMT), generally offering 24-hour trading with no interruption. Some emerging market currency pairs may have unique hours.

- The minimum quantity to trade Forex CFD with uSMART is 1,000, with minimum increment of 1,000 of the currency pair's base currency.

- For foreign exchange CFD trading, margin and unrealized profit or loss are calculated in the quoted currency of the currency pair, but at the time of closing a position, any realized profit or loss will be automatically converted to the base currency (USD) and a currency conversion fee will be charged. Additionally, a fee for converting to USD at the time of settlement will also be applied.

- CFD trading supports "netting off", which means that it is possible to take an opposing position, for example: If a trader originally holds a long position of 5 lots, they can sell 15 lots of the contract if they have enough margin. This would effectively close their original position and take an opposite position at the same time.