Suppose an investor who prospect exchange rate of EUR/USD will rise in the coming days and decide to buy EUR/USD contracts. Each lot of EUR/USD contract gives a contract size of EUR100,000 and the minimum fluctuation US$ 0.0001 that brings to a change of US$ 10.00 of profit (or loss).
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Bought 2 lots of EUR/USD contracts at 9:45 am |
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Bought-in Price: |
1.4980 |
|
Capital Paid |
US$ 2,000 x 2 = US$ 4,000 |
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Sold 2 lots of EUR/USD contracts at 2:00 pm |
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Selling Price |
1.5080 |
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Profit (or Loss) |
US$ (1.5080-1.4980) x 100,000 x 2 = US$ 2,000 |
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Investment return (%) |
2,000/4,000 =50% |
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EUR/USD price fluctuation (%) |
(1.5080-1.4980) / 1.4980 x 100% = 0.67% |
The above EUR/USD transaction showed how to achieve an impressive return by using leverage system. However, investors should be aware that the greater the leverage, the greater the risk.
|
Bought 2 lots of EUR/USD contracts at 9:45 am |
|
Bought-in Price: |
1.5080 |
|
Capital Paid |
US$ 2,000 x 2 = US$ 4,000 |
|
Sold 2 lots of EUR/USD contracts at 2:00 pm |
|
Selling Price |
1.4980 |
|
Profit (or Loss) |
US$ (1.4980-1.5080) x 100,000 x 2 = (US$ 2,000) |
|
Investment return (%) |
(2,000/4000) = (50%) |
|
EUR/USD price fluctuation (%) |
(1.4980-1.5080) / 1.5080 x 100% = (0.66%) |
Note:
1. KAB Strategy (Cyprus) Limited accepts cash settlement for the above investment products only.
2. KAB Strategy (Cyprus) Limited reserves the right to amend the above information without advance notice.
3. The above information is subjected to change upon market conditions.
Risk Warning: Trading leveraged products involve a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. KAB Strategy (Cyprus) Limited is only an execution dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities. KAB Strategy (Cyprus) Limited does not set up any specific financial needs or objectives for clients. It is solely an investor's responsibility to make its own investment decision. |