Terms of Trading
A trader buys at an ASK price and sells at a BID price. The difference between these two prices is spread.
On a Standard account, the spread is fixed* - the dealer offers the best available prices.
The spread is variable on ECN and ECN+ accounts – it varies under the interbank conditions.
The background information on the fixed spreads for Standard accounts can be found under the Contract Specification section (FOREX). The exact spreads for each trading instrument can be found in the MRC-MetaTrader 4 trading platform.
Managing trading positions includes:
- Opening a position – buying or selling a financial instrument as a result of execution of immediate or pending order;
- Modifying a position – change parameters of Stop Loss (SL) and Take Profit (TP) levels of an open position;
- Placing pending orders – placing Sell Limit , Sell Stop, Buy Limit and Buy Stop orders.
- Modifying or deleting pending orders that were not triggered;
- Closing a position – purchase or sale of a financial instrument in order to close an existing position as a result of a market order or a pending order (SL/TP) execution.
The trading platform enables forming the orders for their execution as well as managing open positions. For these purposes several types of trading orders are used:
1. Orders for opening:
Orders for opening can be either an order to buy or an order to sell. Buy orders are executed at an ASK price while Sell orders are executed at a BID price from which the charts are built.
1.1. Market order.
A market order is an order to buy or sell at the current price. The execution of such an order results in opening a trading position. It can be modified by setting Stop Loss and Take Profit levels (see below). Type of execution depends on a type of a trading account.
1.2. Pending order.
A pending order is an order to buy or sell at a pre-determined price in the future. This type of order is used for opening a trading position when the price reaches a certain level. The level of the pending order can be seen in trading platform (Market Watch Window – Symbols – Properties)*.
There are four types of pending orders for opening:
- Buy Limit — an order to buy at a price which is below the current one in expectation that it will escalate after decline.
- Buy Stop — an order to buy at a price which is above the current one in expectation that after reaching a certain level it will continue escalating.
- Sell Limit — an order to sell at a price which is above the current one in expectation that it will decline after escalation.
- Sell Stop — an order to sell at a price which is below the current one in expectation that after reaching a certain level it will continue declining.
* The level of placing a pending order can be changed under strong price fluctuation on the highly volatile instruments or low liquid instruments.
2. Orders for closing:
Order for closing is an order opposite to one for opening. Therefore, buy orders are closed at a BID price while Sell orders are closed at an ASK one.
2.1. Market order
The execution of a market order for closing results in closing a trading position at a current price.
2.2. Pending order
The execution of a pending order for closing results in closing a trading position at a pre-determined price in the future.
The level of placing a pending order for closing can be seen in the trading platform (Market Watch Window – Symbols – Properties)*.
There are two types of pending orders for closing:
- Take Profit (TP) orders serve to lock in profits by closing a position automatically when the price reaches a TP level.
- Stop Loss (SL) orders serve to minimize losses by closing a position automatically in case the price moves in an unfavorable direction and reaches a SL level.
A Trailing Stop is set for each open position and unlike like a Stop Loss, it is executed in the trading platform, not in the server. The Trailing Stop is activated in the context menu of the open position in the ‘Terminal’ window where the required interval between the current price and the trigger price can be chosen from the list. A trailing stop for one open position can be set on one level only.
Upon performing the above actions, the terminal starts to check the profitability of the open position each time a new quote is released. When the profit in pips equals or exceeds the pre-defined level, a command to place the Stop Loss order is given automatically. The order level is set at a given interval from the current price. Then if further price movement entails profitability growth, the Trailing Stop automatically moves the Stop Loss following the price. If the profitability of the position decreases then the parameters of the order remain the same. Thus, the profit of the trade position is received automatically. Each automatic readjustment of the Stop Loss order is registered in the Journal of the terminal.
The Trailing Stop can be disabled by setting ‘None’ in the context menu of the ‘Trade’ Tab in the window. The ‘Delete All’ command in the same menu disables Trailing Stops for all open positions and pending orders.
Note!
Unlike Stop Loss or Take Profit orders, the Trailing Stop functions only when the Client Terminal is activated. That’s why as opposed to the above mentioned orders, the Trailing Stop doesn’t work when the terminal is off. In this case, only Stop Loss level set by Trailing Stop may trigger.
TP and SL orders can be set to an open position only (Market order/ Pending order).
Type of execution depends on a type of a trading account.
* The minimal difference between the current price level and the level at which a SL/TP order level can be placed can be changed under strong price fluctuation on the highly volatile instruments or low liquid instruments.
Instant Execution
In Instant Execution mode the orders are executed at a stated price. In case the price changes during the order execution a trader receives a Requote which shows new quotes available. A trader can either accept a new price or refuse it.
Market Execution (Sell by Market/Buy by Market)
In Market Execution mode, orders are executed at the current market price. Placing the order for market execution means that a trader agrees with the price at which it will be executed in advance. Orders are executed by the market at a current price (live interbank rates when trading FOREX or live exchange rates when trading stocks, futures, indices etc.).
Under strong price fluctuations of the highly volatile instruments or instruments with low liquidity, the price of the orders executed by the market can differ from the price of the opening/closing positions.
Spread change, i.e. the current market situation and buy/sell prices are seen in the trading platform MRC-MetaTrader in ‘Requote Window’ as well as in ‘Market Watch’ and ‘New Order’ windows, and in ‘Trade’ tab of ‘Terminal’ window after restarting trading platform.
- On Standard accounts the orders are executed in Instant execution mode*.
- On ECN accounts the orders are executed by the market.
- On ECN+ accounts the orders may be executed by the market or instantly depending on the traded instruments (ECN currency pairs or other instruments available).
In case a price gap occurs, pending orders are executed at the stated price unless it does not seem possible due to the market situation. In this case the order is executed at the closest market price.
Phone Trading
In case of Technical malfunctions or the impossibility to use the trading platform, a live trading account holder can form a trading order by phone.
You will need to provide the following information:
- login
- password
- trade instrument: name of the exchange symbol, name of the stock exchange if necessary
- transaction: buy (long-term) or sell (short-term)
- number of lots
Forming a trade order by phone, the time for open/close decision can take 5 seconds.
Your trade order will be automatically fixed and regarded as a trade protocol. The time of your order acceptance is the call completion time. Immediate order execution at the market prices is guaranteed by MRC Markets. Accepting orders when the market is not liquid, to execute immediately MRC Markets guarantees to execute the order at the first possible price after liquidity is restored.
Under the terms of trading in the ECN system, the orders are executed by the market.
Currency Conversion
When the currency of the instrument used in trading differs from the deposit currency, it is converted on the basis of the current currency rates.
Target Loan
The loan is granted to the clients holding accounts with balance exceeding 10 000 USD (or equal sum in other currency), a sum of up to 200 % of a deposit is offered for a period of 1 year or more to trade in financial markets via MRC-MetaTrader 4 Platform.
Details
Annual Accrual of Interest
You can trade in the financial markets with a part of your balance, while the funds that are not used for trading will bring you an extra income equal to a bank deposit!
On a monthly basis any funds that are not used in trading gain interest of :
- 2.00% per annum for deposits in USD
- 1.50% per annum for deposits in EUR
- 2.00% per annum for deposits in GBP
- 1.00% per annum for deposits in CHF
- 0.50% per annum for deposits in JPY
- 8.25% per annum for deposits in RUB
- 5.00% per annum for deposits in INR
- 6.00% per annum for deposits in CNY
Annual Interest is accrued on the assumption of obtaining a certain monthly volume of trading activity on a group of Forex instruments depending on the size of your trading account deposit.
- For annual interest to be accrued with a balance starting from 1 000 000 USD (or an equal sum in other currency) your monthly volume summary should exceed 1 000 lots.
- For an annual interest to be accrued with a balance starting from 100 000 USD (or equal sum in other currency) your monthly volume summary should exceed 100 lots.
- For an annual interest to be accrued with a balance starting from 10 000 USD (or equal sum in other currency) your monthly volume summary should exceed 10 lots.
- For an annual interest to be accrued with a balance starting from 1 000 USD (or equal sum in other currency) your monthly volume summary should exceed 1 lot.
- For an annual interest to be accrued with a balance starting less than 1000 USD (or equal sum in other currency) your monthly volume summary should exceed 0.5 lot.
The accrued amount can be used to trade and/or withdrawn from the account in a proper order. The interest rates can be changed in accordance with the changes in base rates of central banks. The interest rate (IR) amount can be seen in the Account History section of the MRC- MetaTrader 4 terminal on the last day of each month.
The sum of the interest rate is accrued automatically to each trading account on the last day of each month irrespective of meeting the abovementioned conditions.
The volume of trading is checked at the moment of fulfillment upon your next request. If the volume is sufficient for trading in the chosen instruments and with your amount of deposit, you will be accrued the annual interest.
In case the condition isn’t met, the accrued IR amount is charged-off with the comment "-IR" (interest rate) prior to the currency conversion or withdrawal of funds.
Contract Size
Contract size is measured by trade lots. One lot is equal to 100 000 units of the base currency (FOREX) or minimum 10 stocks. The minimum contract size is 0.1 of a lot. Base currency is the first currency of a currency pair.
Currency of Deposit
Funds on a trading account can be kept in the following currencies: USD, EUR, GBP, CHF, JPY, RUB, INR, CNY, PLN, BRL. The currency of deposit can be changed upon client’s request provided that there are no open positions or pending orders. Conversion is performed at current exchange rates, at a fee of 0.2 of the balance of account, but not less than 10 USD is charged. When funds are deposited to a trading account for the first time, the conversion fee is not charged.
Leverage
The 1:100 leverage is offered by default for Forex trading when opening a trading account. To open a position with contract size of 1 lot and with leverage of 1:100 a trader needs the amount which is equal to 1000 units of the base currency. The leverage can be changed after the Company considers the respective request from the account holder.
When trading in the FOREX market, an account holder can choose any leverage: 1:20, 1:50, 1:100, 1:200, 1:300, 1:400, 1:500.
For СFD trading fixed leverage of 1:5/1:20 is provided pursuant to the terms of a given stock exchange.
The Company retains its right to change the leverage under the market situation with notification of the account holder.
Rollover of Positions
Open positions held overnight can be rolled over. Rollover charge (SWAP) is calculated at 23:59 GMT daily in pips per day as a result of position re-opening. Rollover takes place every day. Positions are re-opened at closing prices without spread charging.
FOREX
Positions held open for 24 hours are rolled over at 00.00 GMT by way of market SWAPs, which can be either positive or negative depending on refinance rates and interbank interest rates.
Rollover from Wednesday to Thursday is charged at a triple rate.
SWAP in the Forex market refers to a fee for overnight rollover.
Positive/negative SWAP depends on the difference between deposit and credit interest rates. A SWAP is positive if the deposit interest rate is higher than the credit interest rate, otherwise a SWAP is negative.
All settlements in the Forex market are fulfilled the day following the transaction. In case of rollover from Wednesday to Thursday the value date is postponed till Monday, therefore a SWAP is charged at the triple rate.
Calculations of SWAP for GBP/USD:
Interest rates of central banks:
UK – 5%, USA – 2%
Transaction: selling or buying 1 standard lot (100 000 units of the base currency, GBP)
GBP/USD exchange rate: 1.9800
SWAP charging:
Per annum: $5940 = (5% – 2%) × 100 000 × 1.9800) /100%)
Per day: $16.27 (5940/365).
When opening a long position (buy) on GBP/USD currency pair you take a credit in USD at 2% per annum and make a deposit in GBP at 5 % per annum. Since the deposit interest rate is above the credit one, you will get $16.27 on your trading account.
When opening a short position (sell) on GBP/USD currency pair you take a credit in GBP at 5% per annum and make a deposit in USD at 2 % per annum. Since the deposit interest rate is lower than the credit one, $16.27 will be charged from your trading account.
Stock Market and Futures Contracts
Rollover of open positions on CFDs and futures contracts is subject to a fee. A rollover fee depends on the refinance rate of an instrument currency and the closing price of this instrument on the exchange.
Rollover of positions on CFDs and futures contracts Friday to Monday is charged at a triple rate.
Margin Trading
When opening a trading position a certain amount (Deposit Margin) is reserved on the account. The Deposit Margin depends on the size of the open position as well as the size of the credit leverage and is equal to:
- FOREX instruments – 1% of the size of the contract
- Gold, silver, platinum and palladium – 2% of the size of the contract
- CFD stocks - from 5% to 20% of the size of the contract (depending on the stock exchange)
- Commodity futures – for each futures contract a fixed Deposit Margin within 5 – 15% of the size of the contract is set.
MRC Markets reserves the right to change Margin Percentage depending on the market situation.
Note! Margin trading with increased leverage implies not only high return, but higher risks as well.
In case margin trading results are in negative balance of a trading account, i.e. sustained losses exceed the size of own funds, the amount of the loss shall be covered by the next funding into the trading account. MRC Markets reserves its right to compensate for a negative balance of client’s trading accounts by charging the amount of loss from any other trading account held by this client.
Margin Call
The following key values define the state of a trading account:
- Assets = Balance + Sum of profits/losses for all open positions
- Used Margin = Sum of margin for all client’s open positions
- Free Margin = Assets – Used Margin
Free Margin must be maintained at the level sufficient to cover all opened positions, otherwise you should do the following:
- Close some open positions to reduce the Used Margin
- Deposit additional funds to your account in order to increase Assets and Free Margin
In the case of Free Margin dropping below zero or below 100% percentage you will automatically receive a Margin Call. After that your positions will be closed one by one starting from the least profitable, until the value of the Free Margin becomes positive.
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