Forex Margin Fee Question...

Discussion in 'Forex Trading' started by Trend Fader, Nov 24, 2005.

  1. I am new to FX so please help.... assuming I open an account with a broker like cms that gives me 400:1 leverage .. if i were to go and use all that margin would they charge me interest fee.. similar to what stock brokerages charge for margin... Do these brokers that have high leverage 100:1 and more pay interest for carry trades?

    I have an account setup with Oanda.. assuming I were to go on 50:1 leverage with them ( thats there max) and I did a cary trade like aud/jpy would i get the full interest if i went on max margin.. basically is oanda charging me a seperate fee for loaning me the money so i can trade 50x my initial capital .


    thanks
    --MIKE
     
  2. Seperate question.. assuming i went max margin and i get huge directional move with massive slippage .. is it possible to owe the broker money after account is blown up.
     
  3. drasfs

    drasfs

    They charge you rollower interests, as well as spread fees. There are however brokers out their with as tight as a 2 spread fee on all major currency pairs and with no rollover interests.

    I would also recommend you open an account with someone letting you use multiple stop and limit orders.

    With 400 leverage you can buy a lot for 250 dollar.

    I would however not reccomend you to trade with no more than 20 to 1 leverage. Preferably, open a demo account, and open a live account when you can make profits.
     
  4. drasfs

    drasfs

    They tell you that you have a negative balance protection, but if you incur a negative balance, it will go to zero again with your next deposit.

    You can circumvent paying the negative balance by closing the account and open a new one, and thus not take the pain.
     
  5. In the small print usually not when you go over 50:1.


    Do these brokers that have high leverage 100:1 and more pay interest for carry trades?
     
  6. Look here and note item 15 B stating in writing that you will never have a negative balance:

    http://fxtrade.oanda.com/fxtrade/doc/customer_agreement.pdf



     
  7. If you use your margin there is a not a fee directly related to that.

    But....

    If you buy a pair in the Positive interest direction then you get paid

    In the Negaitve direction...then you pay

    Now there are some Dealer/Marketmakers that do not do this! They only collect interest!

    Forex, is the wild west of trading! There is not much standardization.

    Michael B.

    if i were to go and use all that margin would they charge me interest fee.. similar to what stock brokerages charge for margin... Do these brokers that have high leverage 100:1 and more pay interest for carry trades?