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Trading Info

Opening Positions

To initiate a position, from within the Xtrade trading platform display screen, click the desired "BUY" or "SELL".
Depending on which instrument you selected, you must complete the following:

Forex Purchase: Choose the number of basic units/lots that you want to Buy or Sell.

Shares or Stocks: Choose the number of shares that you want to Buy or Sell.

Contracts for Indices: Choose the number of contracts that you want to Buy or Sell, with each transaction representing a multiple USD, EUR (or other currency) value of the traded.

Contracts for Commodities: Choose the number of basic units/lots that you want to Buy or Sell.

(Optional) Stop Limit (Close at Profit Rate): Enter the Stop Limit amount that you want to sell/buy the instrument at, representing the maximum amount of profit that you desire to make. The supplied default value is usually 1 pip above/below your purchase/sales rate.

(Optional) Stop Loss (Close at Loss Rate): Enter the Stop Loss amount that you want to sell/buy the instrument at, representing the maximum amount of loss that you want to incur on your initial transaction. The supplied default value is usually 1 pip below/above your purchase/sales rate. Note that after a favourable rate movement, manually adjusting this stop/limit rate ("Edit Position")can ensure that profits are locked in.

(Optional) Limit Orders (Buy/Sell) when Rate is: Set your price to Buy/Sell the instrument when or if it meets your specified price. Set the Limit Rate by selecting the limit order check box (Buy/Sell when Rate is), enter your desired order rate (From current Rate) and click Buy/Sell.

Trading example - LOSS

Say you deposit $25,000 in your CFD account. Your account will appear as follows:

  • Equity: $25,000. (Deposits - Withdraws + P&L of opened positions + Closed P&L).
  • Available Balance: $25,000 (Equity- used Margins).
  • P&L = $0 (total profit and loss of all open positions including daily Premiums).

There are some other important concepts that you need to understand when reading this example.
The first is Initial Margin. Initial Margin is the amount of margin required to be posted to your account in order to open a position. In this example, the Initial Margin requirement is 20% (as required by the ASIC Rules).
The second important concept is Maintenance Margin. This is the minimum amount of Equity that must be available in your account to maintain your open positions and avoid it or them being automatically terminated under the ASIC Rules. Maintenance Margin is fixed at 50% of the Initial Margin. If your Equity goes below the Maintenance Margin threshold, Xtrade is required by law to close-out your positions until your Equity returns to above the Maintenance Margin threshold, or until all of your open positions are closed out, whichever occurs first.

**In our platform we call Initial margin Required Securities

  • 10.20am – You buy 200 Google shares (CFDs) at $590 per share
  • The total value of this trade is $118,000 ($590*200).
  • Your Initial Margin is $23,600 (20% * $118,000 = $23,600).
  • Your Available Balance at this point is $1,400 ($25,000 initial equity - $23,600 Initial Margin requirement).
  • The Maintenance Margin is $11,800 (50%*$23,600=$11,800).
  • This means that if the value of your position on the 200 Google shares were to decrease and your equity fall below $11,800, then your Equity will have fallen below the Maintenance Margin threshold and Xtrade is required by the Rules to terminate your open positions.

1.00pm - Google shares drop to $560 per share

  • The total value of 200 shares of Google has declined to $112,000 (i.e. a $6,000 decrease in value from when you initially purchased the shares).A loss of -$6000 has been incurred (200*($560-$590)).
  • 'Equity' is therefore $19,000 ($25,000 initial equity - $6000 loss). At this point your equity has not fallen below the Maintenance Margin threshold of $11,800. You may be asked to provide more margin, but your position will not be terminated.

1:15 pm - Google shares fall to $520 per share

  • The total value of 200 shares of Google has declined to $104,000. A loss of -$14,000 has been incurred (200*($520-$590)).
  • Your Equity is now $11,000 ($25,000 initial equity - $14,000 loss). At this point, your Equity is $11,000. This is below the $11,800 Maintenance Margin threshold required to maintain an open position on 200 Google Shares. Therefore, your Google shares will be liquidated by Xtrade.

Following this liquidation, your balance is:

  • Equity: $11,000.
  • Available Balance: $11,000 (Deposits - Withdraws + P&L of closed positions+ Open P&L – Used Margin).
  • P&L = $0 (no open positions remaining).

Trading example - PROFIT

Say you deposit $1,000 in your CFD account. Your account will appear as follows:

  • Equity: $1,000. (Deposits - Withdraws + P&L of opened positions + Closed P&L).
  • Available Balance: $1,000 (Equity- used Margins).
  • P&L = $0 (total profit and loss of all open positions including daily Premiums).

As with the above example, there are some other important concepts that you need to understand when reading this example.
The first is Initial Margin. Initial Margin is the amount of margin required to be posted to your account in order to open a position. In this example, the Initial Margin requirement is 5% (as required by the ASIC Rules for gold).
The second important concept is Maintenance Margin. This is the minimum amount of Equity that must be available in your account to maintain your open positions and avoid it or them being automatically terminated under the ASIC Rules. Maintenance Margin is fixed at 50% of the Initial Margin. If your Equity goes below the Maintenance Margin threshold, Xtrade is required by law to close-out your positions until your Equity returns to above the Maintenance Margin threshold, or until all of your open positions are closed out, whichever occurs first.

9:00pm - you ‘Buy’ 10 ounces of Gold at $1,000 an ounce

  • The total value of this trade $10,000 (10 x $1,000).
  • The Initial Margin requirement of 5%, works out at $500 (5%*$10,000=$500).
  • The Maintenance Margin is $250 (50%*$500).
  • Your EQUITY at this point to cover a potential Margin Call is $750 ($1000 initial equity - $250 Maintenance Margin requirement).

10.15pm – Gold jumps to $1,050 per ounce

  • The total value of 10 ounces of Gold has increased to $10,500.
  • A profit of $500 has been realised (10*($1050-$1000)).
  • Equity: $1,500 ($1,000 initial equity + $500 profit).
  • At this point, your Take Profit order executes and the position is closed. A $500 profit has been made on the transaction.
Trading CFDs involves significant risk of loss. Trading FX/CFDs involves a significant level of risk and you may lose all of your invested capital. Please ensure that you understand the risks involved.