TRADING MECHANISM CONTENTS Ref: 42534

Transcription

1 TRADING MECHANISM CONTENTS Ref: Purpose and Scope 2. Financial instruments offered for trading 3. Foreign Exchange ( Forex ) 4. Future (OTC) 5. Contract For Difference ( CFDS ) 6. Multi-terminal conditions 7. Trading methods 7.1 Instant Trading 7.2 Market Execution/ One-Click Execution 8. Leverage 9. Maximum number of transactions 10. Stop out 11. Hedging 12. Grace Period 13. Cost and Charges 14. Margin Requirements 15. Charts 16. Binding Effects NOTE: This document is updated regularly. It is clients duty to inquire/check for any amendments that might occur within the document, at any time. 1 Trading Mechanism

2 TRADING MECHANISM 1. PURPOSE AND SCOPE The purpose of this Trading Mechanism ( TM ) is to give an overview to clients in regards to trading with financial instruments offered by Windsor Brokers Ltd. ( Windsor or the Company ), margin required for trading, leverage, charges etc., prior to clients trading. This TM should be read in conjuction with the Order Execution Policy and the Contract Specification document. 2. FINANCIAL INSTRUMENTS OFFERED FOR TRADING Financial instruments can be traded in lots and portions of lots rather than with the actual contract size. The following categories of financial instruments are offered for trading: a) Foreign Exchange ( Forex or FX ) b) Future (OTC) c) Contract For Differences ( CFDs ) Table 1 - Products Financial Instrument Executive Mega Standard Dynamic STP Foreign Exchange Dynamic Fixed Spread Forex Currency Pairs Spot Precious Metals - Futures OTC Currencies Precious Metals Indices Commodities Energies CFD USA Stocks Indices - Commodities - 3. FOREIGN EXCHANGE Foreign Exchange instruments are traded as Market Execution / One-Click Execution. 4. FUTURE (OTC) Futures (OTC) instruments are traded as Market Execution / One-Click Execution. Future (OTC) instrument(s), due to expire, should be closed prior to the Expiry date (see Contract Specification document), approximately two to three hours before the COB*, otherwise, the Company reserves the right to close all open positions, for the specific instrument, without prior notice. The Expiry Date varies from one instrument to another. * closing of the trading session or closing of the day The Starting Date and Expiry Date can be viewed under the Contract Specification Document. 2 Trading Mechanism

3 Future (OTC) Precious Metals prices are based on the underlying Future instrument price with an additional spread of 0.2 on Gold and on Silver, under normal market conditions. Future (OTC) Indices prices are based on the underlying Future instrument price with an additional spread of 1 on Big Dow Jones 30, 0.5 on S&P 500, 0.5 on Nasdaq 100, under normal market conditions. Future (OTC) Commodities prices are based on the underlying Future instrument price with an additional spread of 0.10 up to 1.00, under normal market conditions. Future (OTC) Energies prices are based on the underlying Future instrument price on Light Sweet Crude Oil (generated from NYMEX exchange), Brent Crude oil (generated from ICE exchange) with an additional spread of 0.02, and on E- Natural Gas with an additional spread of 0.01, under normal market conditions. 5. CONTRACT FOR DIFFERENCE ( CFDS ) CFD Indices are traded as Instant Execution, in quarterly sessions. CFD Commodities are traded as Instant Execution, traded in monthly sessions. Table 2 CFD Indices CFDs Executive Mega Standard Dynamic STP Dynamic Fixed Spread Dow Jones (DOW...) Dow Jones (DJ...) - - S&P 500 (SP...) - - Nasdaq (ND...) - - CFD Commodities Light Sweet Crude Oil (OIL...) - - Light Sweet Crude Oil (CL...) - - Brent Crude Oil (BR.) - - The last four digits of the instrument represent the active month/year of the instrument, e.g. DOW0916/DJ0916 = Sep Prices on CFD indices are based on the underlying Future instrument price with an additional spread of 2 on DOW, under normal market conditions. Prices are on CFD commodities based on the underlying Future instrument price with an additional spread of 0.03 on OIL and 0.02 on CL and BR, under normal market conditions. CFDs, due to expire, should be closed prior to the Expiry date (see Contract Specification document), approximately two to three hours before the COB*, otherwise, the Company reserves the right to close all open positions, for the specific instrument, without prior notice. The Expiry Date varies from one instrument to another. * closing of the trading session or closing of the day CFD USA are traded as Market Execution / One-Click Execution Margin level is calculated by multiplying the Contract Size, the trade price, the volume (number of lots) and percentage (applied by the Company), as detailed under the Contract Specification Document: Contract Size x Traded Price x No. Of Lots x % Margin Requirement calculation: 1 standard lot = 1000 shares 3 Trading Mechanism

4 Table 3 Example of calculation Instrument Contract Size Traded Price No. of Lots % Margin requirement Yahoo % $ (3,200.00) Yahoo % $ 17, Net Open positions 4 $ 14, In cases where an account carries more than one type of CFD USA, the margin requirement will be calculated separately for each CFD USA and the sum of all margins will display the total margin requirement. 6. MULTI-TERMINAL - CONDITIONS 6.1 The maximum number of lots requested, in total, for all accounts, should not exceed the permitted maximum number of lots, per financial instrument, as specified in the Contract Specification Document. Otherwise, Windsor reserves the right to: reject, partially or in full, the request for execution of orders and/or transactions; execute in different manner the request for execution of orders and/or transactions; reverse, partially or in full, the orders and/or transactions. 6.2 The maximum number of lots, per financial instrument, per account shall: not exceed the specified in the Contract Specification Document, otherwise, system will automatically confirm the maximum allowed number of lots; be based on the the equity of the account, otherwise, the request will be rejected automatically by the system. 7. TRADING METHODS 7.1 Instant Execution 7.2 Market Execution/ One-Click Execution 7.1 Instant Execution Instant Execution is based on the concept of buying/selling a financial instrument at the current market price. The price to buy or sell a financial instrument may change before the confirmation, therefore the Client has the option to accept the new price (re-quote) and complete the transaction, or to reject the new re-quoted price and request again. 7.2 Market Execution/ One-Click Execution Market Execution/ One-Click Execution is based on the concept of buying/selling a financial instrument at the market, i.e. the market price at the time that the request was received/confirmed by the Company and not the price that was displayed at the time of the request. The confirmation of the price, on the requested financial instrument, may change during the time interval between the request, reception and transmission/execution of the request. The Client does not have the option to request again (re-quote) or cancel the request and acknowledges that Windsor is not liable, whatsoever, in such circumstances. Note: Despite the trading method used, delay(s) may occur during confirmation of the requests due to: high volume requests (number of lots); volatile markets; internet connection; other. 4 Trading Mechanism

5 8. LEVERAGE The change of leverage will be in accordance with the net exposure of the Client/instrument, once the Net Open positions ( NOP ) exceeds 15 standard lots. NOP refer to accumulated positions held open by the Client on a specific instrument, regardless of the type of account. Change of the leverage will affect the stop out level of account(s). Table 4 - The default and maximum Leverage offered Leverage Executive Mega Standard Dynamic STP Dynamic Fixed Spread Default 1:100 1:400 1:100 1:500 1:500 1:400 1:500 Maximum 1:100 1:400 1:500 1:500 1:500 1:400 1:500 Table 5 - The relevant trading conditions related to the specific leverage Default Leverage Margin Call Stop Out Level (in normal market conditions) Margin Requirement (in normal market conditions) 1: % 25% / 50% () US$200/lot 1: % 20% US$250/lot 1: % 10% or below US$ 500/ lot 1: % 10 % or below US$ 1,000/ lot 1:50 100% 10 % or below US$ 2,000/lot 1:33 100% 10 % or below US$ 3,030/ lot 1:25 100% 10 % or below US$ 4,000/lot 1:20 100% 10 % or below US$ 5,000/lot 1:5 100% 10 % or below US$ 20,000/lot 1:1 100% 10 % or below US$ 100,000/lot Table 6 - Exceptions applied on Future (OTC) instruments Instrument Margin requirement Future (OTC) Japanese Yen double than displayed in Table 4 Natural Gas double than displayed in Table 4 Table 7 - The leverage change based on the NOP Leverage * 1:400 or higher Up to 15 Lots 1:200 Up to 30 lots NOP/standard lot 1:100 Up to 100 lots 1:50 Up to 200 lots 1: and above the levareage level shall remain the same in cases where the default leverage is lower than the afore-mentioned in the Table 5. 5 Trading Mechanism

6 Leverage will return to its initial levels when considered convenient. Note I: Contract Specification Document details default margin requirement per instrument, in normal market conditions. Note II: Different Margin Requirement may be applied and clients are notified accordingly. Note III: Leverage, other than the default, should be requested by the Client. Note IV: Accounts carrying above 100 lots open/unhedged, should maintain double the margin required on leverages 1:100 and above. 9. MAXIMUM NUMBER OF TRANSACTIONS Table 8 Transactions* Executive Mega Standard Dynamic STP Dynamic Fixed Spread Maximum Number N/A 30 N/A *number of transactions, including orders, permitted to be carried by account(s). In cases where the number of transactions exceeds the maximum amount permitted, the system will reject further requests. 10. STOP OUT Account(s) on Margin call which is neither supported with additional funds nor has increased the equity within the account(s) by reducing open positions, will be stopped out by the Company as soon as the margin level reaches or drops below the necessary threshold. Table 9 Stop Out Executive Mega Standard Dynamic STP Open Positions hedged Dynamic Fixed Spread hedged¹ / liquidated² hedged liquidated liquidated hedged¹ / liquidated² hedged¹ / liquidated² Pending Orders - deleted - deleted deleted deleted deleted ¹ in cases where the maximum number of transactions is not reached (table 8) ² in cases where the maximum number of transactions is reached, as referred in the Table 8; all existing hedged positions will be closed with each other while the open positions will be liquidated. Note: All pending orders will be deleted MINI accounts only The Stop Out process will be performed as followed: a) all hedged positions will be liquidated; b) all remaining open positions will be liquidated at the Stop out market level alerted and/or last available price. MICRO accounts only a) open positions will be partially liquidated in order to bring the margin level back to its required level; b) all open positions will be liquidated in cases where the partial liquidation does not bring the margin level back to the required level. 6 Trading Mechanism

7 11. HEDGING On the last trading day of the week (Friday), or in cases of early close, due to market holidays, each account holding open/unhedged positions should maintain a Free/available margin (equity to margin level) as per the table below. In cases where the Free/available margin falls below the minimum required level, the Company reserves the right to hedge partially or fully any open position (without prior notice), in order to meet the required level. Table 10 Leverage Level Margin level required (minimum) 1:100 or less 100% 1: % 1: % 1: % Note I: Account(s) holding hedged positions on Forex Currency pairs, Spot Precious Metals and CFD USA are subject to applicable Rollovers/Swap, for each position that is held open overnight. Note II: Once the equity of account(s), holding the fully hedged positions, reaches zero or below, the account(s) will be provided with a grace period of 14 days prior to closing all open positions. Note III: No margin requirement will be applied on fully hedged positions. 12. GRACE PERIOD Accounts with fully hedged positions are provided with a grace period of 14 days, for the purpose of adding sufficient funds. In cases where no funding takes place, all hedged positions will be liquidated automatically with each other, on the 15 th day, as from 23:00 hrs Cyprus local Time, GMT+2 winter time, GMT+3 summer time. 13. COSTS/CHARGES Rollover / Swap Rollover or Swap is applied to positions on Forex Currency pairs, Spot Precious Metals and CFD USA, when held open overnight. Swap can be a positive or a negative amount, depending on the financial instrument and on the direction (sell or buy). The value date for transactions on Forex currency pairs, Spot Precious Metals and CFD USA is usually one or two days subsequent to the transaction date. As a result, all positions held open, overnight, will be subject to Roll-overs/Swap, until they are closed. Example of value dates: Open trade Value date Open trade Close trade No. of "Roll over" days Monday Wednesday Monday Tuesday 1 Tuesday Thursday Tuesday Wednesday 1 Wednesday Friday Wednesday Thursday 3 Thursday Monday Thursday Friday 1 Friday Tuesday Friday Monday 1 Note I: Rollover/Swap are applied based on the value date and not the traded date. Note II: Trades that are opened and closed during the same day will have the same day value date and therefore no Rollover/Swap will be applicable. 7 Trading Mechanism

8 Calculation of Swap per day For Forex Currency pairs/spot Precious Metals: (Swap value) x (pip value in US$) x (no. of lots) = US$ For CFD USA: (traded price of CFD USA) x (Swap value) x (no. of lots in shares) / 360 (days) = US$ Note I: Rollover/Swap charges are updated on a regular basis without prior notice to the Client. Note II: Rollover/Swap charges are applied to each Forex Currency Pairs, Spot Precious Metals and CFD USA open position not taking into consideration whether the positions are partially or fully hedged Storage Storage is a charge applied to accounts, carrying open positions on Forex Currency pairs, Spot Precious Metals and CFD USA, which are not subject to Rollover/Swap. Opposite to Rollover/Swap, Storage is always a negative amount and it is not affected by the direction of an open position (buy or sell). Calculation of the Storage charge per day (total number of lots of open positions per financial instrument) (both sell and buy) x Storage value Note I: Storage charges are updated on a regular basis without prior notice to the Client. Note II: Storage charges are applied to each Forex Currency pairs, Spot Precious Metals and CFD USA position held open, not taking into consideration if position(s) is partially or fully hedged. Note III: The Company may, apply Rollover/Swap on Forex Currency pairs, Spot Precious Metals, at any time if deemed necessary. Note IV: The Company may apply Rollover/Swap, as from the date that it is considered necessary, on all transactions executed under account(s), irrelevant if the account was activated under the Storage condition. Note V: The Company may change the predetermined period of time for the storage charge, without prior notice to the Client CFD USA Corporate Actions Dividend / stock split / reverse stock split Corporate actions may have indirect impact on the price of the CFD USA positions held open at the time of the action. Carrying short CFD USA positions open on the ex-dividend and Stock split, usually effect the market in the same manner. Announcement on dividend distribution and/or stock split may require relevant adjustment to be made based on the outcome. Reverse stock split usually have the opposite effect to those of dividend distribution or stock split, therefore, carrying long CFD USA positions open during the reverse stock split, may be subject to required adjustment(s) Other Other corporate action(s) that may impact on the price of the CFD USA positions held open at the time of the action Currency Conversion Closed transactions on Forex currency pairs are subject to currency exchange added by a factor of +/- 1 up to 2%. 14. MARGIN REQUIREMENTS mum amount of funds required to be maintained by account(s) as a guarantee for each position held open, in accordance with the applicable leverage. 8 Trading Mechanism

9 15. CHARTS The information provided through the charting system, available through Online Trading Platform, is for informative purposes only and it may differ from the prices offered for trading purposes. Clients should either use the Market Watch through Online Trading Platform, or confirm the correct prices with Windsor. 16. BINDING EFFECTS The Client acknowledges and accepts to be bound by the provisions of this TM and any amendment or variation thereof duly effected by provisions of this TM. The Client acknowledges and agrees that the first transaction in account(s), initiated by the Client, following a change to the terms and conditions of this TM, shall constitute the Client s acceptance of the change as of the effective date of the amendment and such initiation and the subsequent execution of such transaction by Windsor shall constitute reciprocal good consideration for the variance or amendment abovementioned, the sufficiency of which is hereby acknowledged and agreed by the Client and Windsor respectively. This document is updated regularly. It is clients duty to inquire/check for any amendments that might occur within the document, at any time. 9 Trading Mechanism