Currency risk management

CFD Trade examples

Example 1

Assume that the investor predicts a strengthening of the Euro currency against the US dollar because of a possible ECB interest rate rise in the market. With 20 000 USD on XTB deposit account, he is certain of his view on the market and buys 2 EUR/USD CFD contracts at 1,2600.

Upon completion of this transaction the investor possesses an open position aimed at an increase in rate of EUR/USD worth 200 000 EUR. The initial deposit for securing the transaction is equal to 1%*200 000 EUR * 1,2600 (current EUR/USD rate) = i.e. 2.520 USD. The investor would gain profits if EUR/USD rate increases over 1,2600, whereas a price reduction below 1,2600 results in a negative balance on the transaction.

Day one

Rate of EUR/USD is 1,2500

The investor’s loss for 2 lots of EUR/USD CFD is

200 000 EUR*(1,2500 - 1,2600) = - 2000 USD

He decides to hold the position and rolls it to next day.

Rolling operation is automatic. His account will be billed with swap point value for one day.

According to X-Trade table, swap points for 1 lot total is -10USD.

Investor’s account will be charged 2*10 USD= 20 USD

Day two

Rate of EUR/USD is 1,2620

The investor gains profit equal to

200 000 EUR*(1,2620 - 1,2600)= 200 USD

The investor decides the profit is not rewarding and decides to hold

the position for the next day.

Again his account is charged with 20 USD swap points value.

Day three

At 14:00 there is news concerning a possible decision about an ECB interest rate rise.The market is uneasy.

At 15:15 the EUR/USD rate is 1,2720

IThe ivestor decides that the current rate level is satisfactory and

closes his position at 1,2720.

His profit is

200 000*(1,2720 - 1,2600) = 3200 USD

However he incurred the cost of swap points for 2 days, so his net profit from the CFD transaction would be

3200 USD -2*20 USD = 3160 USD

Example 2

The investor foresees the strengthening of the American currency against the Euro.

The investor holds 40.000 USD on his XTB investment account. He decides that the current rate of GBP/USD is excessively high and sells 1,5 CFD contracts of GBP/USD at 1,8900. As a result he has an open position aimed at a decreasing rate of GBP/USD worth 150.000 GBP.

Initial deposit for this position is equal to 1,5*1%*100.000 GBP i.e. equivalent of 1500 GBP in USD (2835 USD = 1500 GBP * 1,8900 GBP/USD). The investor would earn a profit if GBP/USD rate falls below 1,8900, the result of the transaction would be negative once the GBP/USD rises over 1,8900.

Day one

Closing rate of GBP/USD is 1,9000

The investor’s loss amounts to

150.000*(1,8900 - 1,9000)= - 1500 USD

Investor decides to hold the position and rolls it to next day.Because he sold GBP/USD, according to X-Trade’s table, his account will be credited with 1,5*5 USD = 7,5 USD, since swap points for GBP/USD on short position for one day are 5 USD

Day two

Closing rate of GBP/USD is 1,8920.

The investor decides that he misjudged the current situation on the market and closes the position.

The loss amounts to

150’000*(1,8900-1,8920) = 300 USD

However, the investor earned on swap points so his net result from the CFD transaction would be:

-292,50 USD = - 300 USD + 7,5 USD

contact us

Choose branch

International

X-Trade Brokers Dom Maklerski S.A.
ul. Ogrodowa 58, 00-876 Warszawa

Sales

Phone:

+48 22 201 95 70

E-mail:

sales@xtb.com

Austria

X-Trade Brokers Dom Maklerski S.A.
German Branch
Mainzer Landstraße 33,
60329 Frankfurt am Main

Office

Phone:

0800 987 23 30

Fax:

+49 (0)69 2475249-19

E-mail:

info@xtb.de

Czech Republic

X-Trade Brokers DM S.A., organizační složka
Pobřežní 12, 186 00 Praha 8
Česká republika

Choose department

Phone:

226 259 900

Fax:

226 259 903

E-mail:

office@xtb.cz

Phone:

226 259 990

E-mail:

sales@xtb.cz

Phone:

226 259 980

E-mail:

support@xtb.cz

E-mail:

dealing@xtb.cz

Phone:

226 259 960

E-mail:

research@xtb.cz

Phone:

226 259 912

E-mail:

marketing@xtb.cz

E-mail:

pr@xtb.cz

Phone:

226 259 913

E-mail:

hr@xtb.cz

France

X-Trade Brokers D.M. S.A.
Bâtiment REGUS
168, avenue de Charles de Gaulle,
92522 Neuilly sur Seine

Choose department

E-mail:

office@xtb.fr

E-mail:

sales@xtb.fr

E-mail:

dealing@xtb.fr

Germany

X-Trade Brokers Dom Maklerski S.A.
German Branch
Mainzer Landstraße 33,
60329 Frankfurt am Main

Choose department

Phone:

0800 987 23 30

Fax:

+49 (0)69 2475249-19

E-mail:

info@xtb.de

Phone:

0800 987 23 30

E-mail:

sales@xtb.de

Phone:

+49 (0) 69 2424 8517

E-mail:

support@xtb.de

Phone:

0800 987 23 30

E-mail:

info@xtb.de

Phone:

+49 (0)69 2475249-0

E-mail:

bewerbung@xtb.de

Phone:

+49 (0) 69 2424 8517

E-mail:

support@xtb.de

Greece

X-Trade Brokers DM S.A., organizační složka
Pobřežní 12, 186 00 Praha 8
Česká republika

Choose department

Phone:

226 259 997

Phone:

226 259 997

Phone:

226 259 980

E-mail:

support@xtb.cz

E-mail:

dealing@xtb.cz

Phone:

226 259 912

E-mail:

marketing@xtb.cz

E-mail:

pr@xtb.cz

Hungary

X-TRADE BROKERS DM SA Magyarországi Fióktelepe
Business Center 22
Baross utca 22-26, 1085 Budapest
Magyar Köztársaság

Choose department

Phone:

1 265 5155

Fax:

1 265 5147

E-mail:

office@xtb.hu

Phone:

1 265 5148

Fax:

1 265 5158

E-mail:

sales@xtb.hu

Phone:

1 266 3710

E-mail:

support@xtb.hu

E-mail:

dealing@xtb.hu

E-mail:

research@xtb.hu

Phone:

1 265 5159

E-mail:

marketing@xtb.hu

E-mail:

hr@xtb.hu

Italy

X-Trade Brokers Dom Maklerski S.A.
X-Trade Brokers Italia,
Via Albricci 9, 20122 Milano.

Choose department

Phone:

272013131

Fax:

2877118

E-mail:

office@xtb.it

Phone:

272014659

E-mail:

sales@xtb.it

Phone:

2874129

E-mail:

dealing@xtb.it

Phone:

2874277

E-mail:

pr@xtb.it

E-mail:

dokk@xtb.it

Netherlands/Belgium

X-Trade Brokers Dom Maklerski S.A.
German Branch
Mainzer Landstraße 33,
60329 Frankfurt am Main

Choose department

Phone:

0800 987 23 30

Fax:

+49 (0)69 2475249-19

E-mail:

info@xtb.de

Phone:

0800 987 23 30

E-mail:

sales@xtb.de

Phone:

+49 (0) 69 2424 8517

E-mail:

support@xtb.de

Phone:

0800 987 23 30

E-mail:

info@xtb.de

Phone:

+49 (0) 69 2424 8517

E-mail:

support@xtb.de

Poland

X-Trade Brokers Dom Maklerski S.A.
ul. Ogrodowa 58, 00-876 Warszawa
Biurowiec A, VII piętro

Choose department

Phone:

+48 22 201 95 50

Fax:

+48 22 520 22 81

E-mail:

biuro@xtb.pl

Phone:

22 201 95 70

E-mail:

sales@xtb.pl

Phone:

22 201 95 60

Phone:

+48 22 520 22 82

E-mail:

dealing@xtb.pl

Phone:

+48 22 201 95 89

E-mail:

pr@xtb.pl

Portugal

X-Trade Brokers D.M. S.A.
Praça Duque de Saldanha nº1 piso 9 fracçao B
1050-094 Lisboa

Choose department

Phone:

211 936 340

Fax:

211 974 565

E-mail:

office@xtb.pt

Phone:

211 936 340

E-mail:

sales@xtb.pt

Phone:

211 936 340

E-mail:

dealing@xtb.pt

Romania

X-Trade Brokers Dom Maklerski S.A.
Sucursala Bucuresti,
Bulevardul Eroilor, nr. 18, sector 5,
Bucuresti, Romania

Choose department

Phone:

31 425.54.90

Fax:

31 425.54.91

E-mail:

office@xtb.ro

Phone:

31 425.54.92

E-mail:

sales@xtb.ro

Phone:

31 425.54.93

E-mail:

dealing@xtb.ro

Phone:

31 425.54.90

E-mail:

research@xtb.ro

Phone:

31 425.54.90

E-mail:

marketing@xtb.ro

Phone:

31 425.54.90

E-mail:

hr@xtb.ro

E-mail:

office@xtb.ro

Slovak Republic

X-Trade Brokers DM S.A., organizačná zložka
Poštová 1, 811 06 Bratislava
Slovenská republika

Choose department

Phone:

259 304040

Fax:

254 652844

E-mail:

office@xtb.sk

Phone:

259 304041

E-mail:

sales@xtb.sk

Phone:

259 304044-5

E-mail:

support@xtb.sk

E-mail:

dealing@xtb.sk

Phone:

226 259 912

E-mail:

marketing@xtb.sk

E-mail:

pr@xtb.sk

Phone:

226 259 913

E-mail:

hr@xtb.sk

Spain

X-Trade Brokers D.M. S.A.
Edificio Iberia Mart I
C/ Pedro Teixeira 8, 8ª Planta
28020-Madrid

Choose department

Phone:

915 706 705

Fax:

914 251 880

E-mail:

office@xtb.es

Phone:

915 702 003

E-mail:

sales@xtb.es

Phone:

915 706 749

E-mail:

dealing@xtb.es

Phone:

915 706 705

E-mail:

marketing@xtb.es

E-mail:

pr@xtb.es

Sweden

X-Trade Brokers Dom Maklerski S.A

Office

Phone:

+ 46(0)8209400

Fax:

+48 225202281

E-mail:

info@xtb.se

XTB UK LTD

UK subsidiary
75 Shoe Lane, 1st Floor London EC4A 3BQ

Choose department

Phone:

0 203 394 1700

E-mail:

uksales@xtb.com

Fax:

0 203 394 1701

Phone:

0 203 394 1700

E-mail:

ukgeneral@xtb.com

E-mail:

ukgeneral@xtb.com

Phone:

0 203 394 1700

Phone:

0 203 394 1700

E-mail:

ukservice@xtb.com

Phone:

0 203 394 1700

E-mail:

uksales@xtb.com

see our offer

Forex
Commodities, Indices
Equity
CFD
Options
and Structured Products

Currency risk management

CFD Trade examples

contact us

Choose branch

International

Sales

Austria

Office

Czech Republic

Choose department

France

Choose department

Germany

Choose department

Greece

Choose department

Hungary

Choose department

Italy

Choose department

Netherlands/Belgium

Choose department

Poland

Choose department

Portugal

Choose department

Romania

Choose department

Slovak Republic

Choose department

Spain

Choose department

Sweden

Office

XTB UK LTD

Choose department

see our offer

Forex

Equity

Options

you may also see