| Currency Abbreviations (Table 1) | ||
|---|---|---|
| EUR | Euro | |
| USD | US Dollar | |
| GBP | British Pound | |
| JPY | Japanese Yen | |
| CHF | Swiss Franc | |
| AUD | Australian Dollar | |
| CAD | Canadian Dollar | |
| NZD | New Zealand Dollar | |
| SGD | Singapore Dollar | |
The exchange rate of any currency is usually given as the Bid price (left) and the Ask price (right). The Bid price represents what will be obtained in the quote currency (US Dollar in our example) when selling one unit of the base currency (Euro in our example). The Ask price represents what has to be paid in the quote currency (US Dollar in our example) to obtain one unit of the base currency (Euro in our example). The difference between the Bid and the Ask price is referred to as the spread.
| 1.0 lot size for different currency pairs (Table 2) | |||
|---|---|---|---|
| Currency | 1.0 lot size | 1 pip | |
| EURUSD | EUR 100,000 | 0.0001 | |
| USDCHF | USD 100,000 | 0.0001 | |
| GBPUSD | GBP 100,000 | 0.0001 | |
| USDJPY | USD 100,000 | 0.01 | |
| AUDUSD | AUD 100,000 | 0.0001 | |
| USDCAD | USD 100,000 | 0.0001 | |
| EURCHF | EUR 100,000 | 0.0001 | |
| EURJPY | EUR 100,000 | 0.01 | |
| EURGBP | EUR 100,000 | 0.0001 | |
| GBPJPY | GBP 100,000 | 0.01 | |
| GBPCHF | GBP 100,000 | 0.0001 | |
| EURCAD | EUR 100 000 | 0.0001 | |
| EURAUD | EUR 100 000 | 0.0001 | |
| NZDUSD | NZD 100,000 | 0.0001 | |
| USDSGD | USD 100,000 | 0.0001 | |
| CHFJPY | CHF 100,000 | 0.01 | |
For example, EUR/USD exchange rate is 1.2505/1.2509 and your leverage is 1:100. You believe that EUR/USD will go up and buy 0.1 lot (minimum contract size) of EUR/USD at 1.2509 (Ask price) - for the contract size refer to Table 2. As we can see from Table 2, 1.0 lot of EUR/USD is 100,000 EUR, which means that 0.1 lot (our example deal size) is 10,000 EUR.
So, you buy 10,000 EUR and sell 10,000*1.2509=12,509 USD. In fact to fund this position you do not have to have 12,509 USD but only 125.09 USD.
By http://www.alpari-idc.com
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