My friend pays $1000 commission per round trip on USD/JPY, what his implied PA

Discussion in 'Trading' started by valuetrader007, Jan 27, 2013.

  1. If someone were to pay around $1000 in commissions to trade the USD/JPY round trip, and all of his money were in that trade, what would be the implied value of their account?
     
  2. we also need to know the broker that he uses and their comissions. this way we will find out his account value.
     
  3. Probably none of your business
     
  4. moarla

    moarla

    to calculate the trading account you need to know also how much leveraged he is in Forex...1:50 1:100 etc...

    he trades one side about 25.000.000... am i right?
     
  5. All it says is traded 200k contracts of USD/JPY on interactive brokers..
    His commission fees are $1000 per round trip per trade, so I was trying to figure out his implied PA.
     
  6. impossible to say. we dont know the stop size.

    but the notional value of each position is around 20 million usd.

    ~0.5 pip commission x 10$ per pip, per full lot = 5$ commission, per lot.

    1000 / 5 = 200 lots

    200 lots x 100,000 = 20 million

    assuming risk per trade of 2%, account size can be guessed at

    10 pip stop = 200 lots x 10 pips x 10 dollars per pip = 20,000 / 2% = 1 million account value

    50 pip stop = 200 lots x 50 pips x 10 dollars per pip = 100,000 / 2% = 5 million account value


    probably between 1 and 5 million
     
  7. moarla

    moarla

    has nothing to do with Stops...

    if your Forex Broker allows you a leverage of 1:200, and there are many of them
    you can trade 25.000.000/side with just


    125.000 USD !!!!


    (stops have to do withj risk, but that is something different)
     
  8. He is trading USD.JPY with Interactivebrokers, and he is trading 200K, equal to 2 standard lots at a bucket shop. The $1000 commission is his commission priced in Yen, not USD, so he is paying approx. $11 USD in commission.
     
  9. And if the entire account equity were tied up in that trade, then the account value is less that approx. $5K USD. Initial margin would be $4,999, and he would need at least 5% on top of that to avoid the danger of a force liquidation, so probably a $5250 account, more or less.
     
  10. WS_MJH

    WS_MJH

    So you just signed up for ET to pry into your "friend's" personal financial matters? This is a creepy thread that should've been deleted.
     
    #10     Jan 28, 2013