Description
With CFDs (Currencies) you can trade Currencies, Gold & Silver.
CFDs (Currencies) uses a specific terminology, therefore several important concepts must be taken into account:
- Currencies, Gold and Silver are defined by three letters
- In the case of a Currency, the first two letters represent the country and the third letter the name of the Currency (eg USD, US-United States; D-dollar or JPY, JP-Japan; Y-Yen; The Euro is an exception to this rule)
- In the case of Gold "XAU" represents an ounce of gold (28.3 grams of gold)
- In case of Silver, "XAG" represents an ounce of silver (28.3 grams of silver)
- Traded Pairs or Crosses
- Currency Pairs (EURUSD, Euro quoted in USD)
- Precious Metal (Gold or Silver) priced in one currency (eg XAUUSD: Gold priced in USD; XAGEUR: Silver traded in Euros)
- The left currency pair is the negotiated asset
- The right currency or Precious metal is the asset price
- EURUSD = 1.30, this means that the price of Euro is 1.3 US Dollars
- Pairs or Crosses are bid-ask quoted
- eg. EURUSD: 1,4000 bid / 1,4002 ask
- For investors wanting to buy Euros (EUR), ask price in USD applies
- For investors wanting to sell Euros (EUR) bid price in USD applies
It is important to notice that you do not need to hold physically the currency or precious metals traded. The outcome of your trading will be simply credited or charged depending on your gains or losses (financial adjustment) in your account.
If you would like to know more about the CFDs (Currencies) you can visit FAQs section.
