Trading margin FX

Why trade margin FX?

There are three good reasons why FX is the world’s most traded market

Read moreLeverage

FX CFDs are traded on margin, typically at 100:1 leverage. This may be a more efficient use of your capital, because you only have to allocate a very small proportion of the value of your position to secure a trade, while maintaining full exposure to the market. In effect, you are increasing your potential to profit. Of course, this means that it's possible to experience losses that are greater than your initial investment.

Read more24-hour market

FX trading is a true 24-hour market. It begins in New Zealand, followed by Sydney, and moves around the world to Tokyo, London and New York. Investors can do something they can’t do in any other financial markets – they can respond to currency fluctuations caused by economic, political and social events at the time they occur, without having to wait for markets to open.

Trading FX also means that you are not exposed to price gapping which may occer between market close and open.

Read moreLiquidity

The FX market is open 24 hours. It is the most heavily traded financial market in the world, with a daily average turnover of well over US$2 trillion. With so many market participants trading over 24 hours, the FX market is more liquid than any other financial market.

For example if you trade a particular currency pair, whether it is for $10,000 or $10,000,000 trade, you will typically receive the same quoted price. This may not be the case in less liquid markets, like the share market.

Investing in CFDs carries significant risks and may not be suitable for all investors. Losses can exceed your initial deposit. We therefore recommend that you seek independent advice and ensure you fully understand the risks involved before trading.

References to all currencies are references to New Zealand dollars (NZD) unless otherwise specified. The content of this website does not constitute a recommendation and, consequently, you should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire any CMC Markets financial product. A Disclosure Document is available at www.cmcmarkets.co.nz or by calling 09 359 1200 and should be considered prior to acquiring or continuing to hold CFDs. Information about our services, including our fees and charges is also available at those sources. CMC Markets NZ Limited (Company Registration Number 1705324).