Key Information Documents

Key information document (FX Spot)
Key information document (FX FORWARD)

Spreads and Margin

The clients of ELANA Trading can trade without any commissions the following currency crosses in the platform ELANA Global Trader:

• Major pairs
• All

Margin

To create a buffer between your trading capacity and the margin close-out level, which ESMA has standardised, ELANA Tradings we applies two different margin requirements:

1. Initial margin: a pre-trade margin check on order placement, i.e. on opening a new position there must be sufficient margin collateral available on account to meet the initial margin requirement.
2. Maintenance margin: a continuous margin check, i.e. the minimum amount of margin collateral that must be held on account to maintain an open position(s). Maintenance margin is used to calculate the margin utilisation.

Different instruments have different initial and maintenance margin, but mathematically spoken, it won´t be possible to open new positions somewhere in between a MU of 50% (if clients has CFD/FX positions only).
To step ahead further questions, we’ll illustrate with an extreme example (CFD/FX) where initial margin (IM) is twice as high as maintenance margin (MM).
Let´s assume you have 10,000 cash and open a EURUSD position that requires full IM of 10,000 EUR. Once the position is open, the MM will be 5000, as for CFDs/FX the IM is twice as much as MM.
If you now lose 1000 EUR, your cash is 9000 EUR, the MM still somewhere around 5000 (slightly below, but let´s not go into that detail) so the MU would be 55.55% (5000/9000*100).
If you wanted to open a NEW position, the margin check would NOT allow it already, because when a NEW position is opened, the margin pre-check will always calculate with the IM of the existing positions (as otherwise ESMA requirements wouldn´t make any sense) so when the pre-Margin check is happening for the new position opening, the EXISTING position is taken into account with a IM margin requirement of 10000. Since the client only has 9000 cash, the new position can´t be opened anymore already as “pre-margin check requirement of existing position = 10000 vs existing cash 9000” – no new exposure is allowed.
Margin Utilization (MU) levels depend on the relation IM vs MM and hence can vary between 50% to 90% depends what the client is trading.

FOREX Trading Hours

ELANA Trading is open for Forex Trading from 20:00 on Sunday until 24:00 on Friday EET time. Some currency crosses, however, have special trading hours as seen in the table below.

Tom/Next Rollover

All open FX positions held overnight are subject to a debit or credit interest rate revaluation to reflect the position being rolled over to a new Value Date. The operation known as the Tom/Next Rollover is applied to spot positions held at 00:00 Eastern European Time on any given trading day.
The ‘rollover’ is made up of two components, namely the tom/next swap points and financing of unrealised profits or losses. The accumulated combined rollover credit or debit is added/deducted from the previous opening price of the position.
The Swap Points used are based on a Tom/Next swap feed from a Tier-1 bank with a mark-up corresponding to +/- 0.55% of daily market overnight interest rates, plus the interest component. Any unrealised profits or losses are calculated as the difference between the original traded rate (possibly adjusted for previous Tom/Next rollovers) and the end of day rate of the traded currency cross at 00:00 Eastern European Time.
The accumulated swap points and interest component are added or deducted to the previous opening price of the position.
To provide full transparency, you can see the Swap Points for every position in the platform from menu Account-> Accounting-> Forex Rollovers
For some currency crosses the time of the rollover as well as the time when the end of day rate of the traded currency cross is defined could be different from the one stated above.

FX Forward Outright

An order to trade a Forex instrument at a fixed price on a fixed date. The price of the forward outright is the spot rate adjusted for the interest rate differential between the two currencies until maturity. FX Forward Outright orders are often used to hedge exposure risks when dealing in foreign markets for periods between two days and twelve months.

Spreads and margin

The rate of the FOREX forward is almost always higher or lower than the corresponding current spot rate of the currency cross. This price difference reflects the difference between the interest rate levels of the respective currencies for the given time period.
FOREX forwards are traded as over-the-counter (OTC) instruments and the quotes do not have a fixed spread, but the further the value date is, the wider the spread becomes. The margin requirement is analogous to the ones for spot currency trade.

FIFO

When netting open FX positions, Saxo Bank uses FIFO rules, which means the first position you open is the first position to be closed.

Netting

Closed Forward Outright position are netted out when the value date of the position equals the current spot value date i.e. the position is changing from a forward to a spot. When the value date on an open Forward Outright position equals the current spot value date, it will be subject to tom/next rollovers and will be treated as a normal spot position from that point onwards.

Precious metals

The spot trade with gold, silver, platinum and palladium is carried out on the principles of FOREX trade, with metals being quoted against currencies. Precious metal spot trade takes place 24 hours a day, the execution is immediate and automatic all the time. Exception is made for periods with low liquidity when the trade is taking place after the client has asked for a quote. The conditions for spot trading with gold, silver, platinum and palladium are the same as the conditions for trading currency pairs (FOREX).

FIFO (First-In-First-Out)

When netting open FX positions Saxo uses FIFO (First-In-First-Out) rules, which means that the first position that you open is the first position to be closed. This is provided that the positions are on the same account and that none of the positions have related orders attached.
Example: You are trading EURUSD and have opened the following positions:

The first long position 1) will net out with the first short position 3), the second long position 2) will net out with half of the second short position 4), leaving only one short position of 1M EURUSD at the end of the trading day.