Currency Trading Handbook
Commerce Bank trading desk is open 24 hours daily from EST 6PM Sundays through EST 4:30 PM Fridays.
Commerce Bank offers trading in the following currency pairs: EUR/USD, GBP/USD, USD/CHF, USD/JPY, USD/CAD, AUS/USD, EUR/GBP, EUR/JPY, EUR/CHF, CHF/JPY and GBP/JPY.
Prices quoted are inclusive of our normal dealing spreads. However, during the market volatility and time when major economic news are released, spreads may widen. The spreads are wider for Retail customers and less for Institutional customers on all major currencies, including US Dollar, British Pound (Sterling), Japanese Yen, Euro, Swiss Franc, Canadian Dollar, and Australian Dollar.
All deals are sized in units of 10,000 of the base currency (ie. GBP/USD is �10,000). All of the deals are numbered in terms of ‘lots’. The maximum deal size available online is 50 million of the base currency. Trades of over 50 million must be executed over the phone with one of the Commerce Bank dealers.
A minimum transaction size is 1 lot, or 10,000 of the base currency. An account with a margin deposit of 2% would open a US$10,000 position and would require an initial margin deposit of US$200.
Through the CBFX Online platform customers are able to execute trades directly from real time streaming bid/ask quotes. Live prices are continuously updated via Java-enabled dealing software and traders can at any time click on the current bid or offer and instantaneously execute a trade.
Trading Over The Internet
Executing a deal via the Internet is a simple two-step process. Simply enter the number of lots and then click on the bid (buy) or offer (sell) for the currency pair you wish to trade – your deal is automatically executed. The dealing software automatically calculates the initial margin requirement based upon the notional amount of the deal, and if sufficient funds are available in your account, will accept the transaction. Deals are confirmed online, normally within one second, and the system instantaneously updates both your open position and calculates your current P&L.
1. Call the trading desk at 617-357-0688 to speak with a dealer.
2. State your name, account number, user ID and password.
3. Ask for a price in the desired currency pair, indicating the amount you wish to trade.
Example: “May I have price in 3 Euro?”
For: EURUSD use Euro
GBPUSD use British Pound
AUDUSD use Australian Dollar
USDJPY use Dollar Yen
USDCHF use Dollar Swiss
USDCAD use Dollar Canada
Long = Buy Short = Sell
3. After a dealer gives you a quote and you wish to open or close a position, you should immediately indicate whether you buy or sell in the following manner because the quote given will expire when the dealer says �CHANGE� or �OFF�:
a) How many lots you are buying or selling.
b) Whether this is an opening position or closing position (if it is to close a position, the dealer might ask you to indicate the opening price of the position that you wish to close).
Example: “Buy 3 Euro, opening position.�
Example: “Sell 2 Dollar Swiss, closing position of a long position at an opening price of 1.6982.�
If you do not wish to trade at that particular quote that you just received from dealer, simply say “nothing there” or �re-price�, at which point you may decide to deal or pass entirely on the dealer quote or re-quote.
5. After you execute your deal, the dealer will confirm your deal details back to you.
6. If it is correct, confirm with the dealer and hang up. You have now finished your phone deal. You will also check that you phone deal is inputted correctly into your account on the on-line trading platform.
Example Phone Deal
Customer: Hi this is customer ABC, account number 123, user ID XYZ and password QRS.
Dealer: Hi ABC, how may I help you? (After confirming the identity of the customer)
Customer: Can I have in price in 3 Euro?
Dealer: Price is 3 Euro is currently 1.1110/15
Customer: I Buy 3 Euro, opening position.
Dealer: To confirm, you bought 3 Euro at 1.1115, opening position for account number 123.
Customer: All agreed.
Dealer: Thank you.
Customer/Dealer: End Call.
The dealing platform provides sophisticated order entry and tracking. Orders may be entered at any rate – inside or outside the existing spread – using the following orders types:
An order based on a current market price.
An order with restrictions on the maximum price to be paid or the minimum price to be received.
Stop Loss orders
Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s position.
According to our dealing room all of the sell stops are filled on a dealer’s bid, and buy stops are filled on a dealer’s offer. In a case that the market gaps over a requested rate, the stops are filled at the best available price.