SPREADS
AvaTrade’s FX Standard BidAsk Spreads are as stated under Normal Market Conditions. Spreads can widen depending on market conditions up to a maximum of Standard Spread X3.
Non FX Spreads (Excluding Gold, Silver & Crude Oil) are quoted as ‘over market spread’, this spread amount is added to the market spread to create the spread on our trading platforms.
AvaTrade is a market maker and is therefore compensated through the BidAsk spread except when otherwise stated. AvaTrade does not charge commissions on any trade.
The only ‘fee’ incurred on any trade is through the spreads quoted. Once you open a trade, you will immediately see a negative Net P/L; this is the spread automatically being charged. As stated, this is how AvaTrade is compensated through the BidAsk spread as a market maker.
You can calculate the cost of the spread charged by using this calculation:
Spread X Lot Size = Spread charged
Example 1
For a 5,000 lot EURUSD Trade, with the Standard Spread of 0.0003 pips the calculation is as follows:
0.0003 X 5,000 = $1.50*
The 1.50 is a USD amount as the USD is the secondary currency in the pair EURUSD (EUR = 1st currency, USD = 2nd currency).
Example 2
For a 100 lot Crude Oil Trade, with the Standard Spread of 0.04 pips the calculation is as follows:
0.04 X 100 = $4.00*
The 4.00 is a USD amount as Crude Oil is denominated in USD.
Example 3
For a 10 lot CAC 40 Trade, with the Standard Spread of 0.25 pips Over Market the calculation is as follows:
Market Spread + Standard Spread X Lot Size = Spread charged
(0.25 + 0.25) X 10 = €5.00*
The 5.00 is a EUR amount as the CAC 40 is denominated in EUR.
*If you are using a USD, EUR, GBP or JPY account you then need to calculate the spread cost into the currency of your account.
All standard spreads on each instrument can be found on the AvaTrade Trading Conditions page:
http://www.avatrade.com/tradingconditions
LOT SIZE
AvaTrade uses a ‘lotbased’ trading system. This makes trading extremely manageable when trading across several markets. All lot sizes quoted on the Forex Trading Conditions page represent the lot size in the base currency.
Lot sizes vary based on each type of instrument traded. All lot sizes quoted on the link below are the minimum trade on the Ava Trader platform.
The quoted lot size for MT4 indicates the standard lot size. The MT4 platform allows you to trade micro and minilots.
Each minimum lot size can be found on the AvaTrade Trading Conditions page:
http://www.avatrade.com/tradingconditions
PREMIUMS/SWAPS
All instruments on AvaTrade platforms are subject to a Premium or Interest Charge which is either credited or debited to your account holding an open position. When a position is held open overnight, then there is a Premium or Interest Charge calculated on that position.
Only positions open at approx. 21:00 GMT are subject to this Premium/Interest Charge. This ‘swap’ is charged automatically and converted into the denominated currency of said account.
The Premium/Interest Charge for each instrument can be found in AvaTrade’s Trading Conditions,
http://www.avatrade.com/tradingconditions
CALCULATING YOUR DAILY PREMIUMS/SWAPS AMOUNTS
You can use the following formula to calculate your daily premium charge using the published Premiums/Swaps:

Rollover Percent Calculation for XXXUSD (GBPUSD, EURUSD, etc.):
Amount X Premium or Interest Rate X Current Price
360 Days

Rollover Percent Calculation for USDXXX (USDJPY, USDCHF, etc.):
Amount X Premium or Interest Rate
360 Days

Rollover Percent Calculation for crosses (CUR1CUR2) – Also used for NonFX Instruments:
Amount (CUR1) X Premium or Interest Rate X Current Price
360 Days
FX, GOLD & SILVER PREMIUMS/SWAPS
All FX instruments on AvaTrade Trading Platforms are subject to a Premium or Interest Charge which is either credited or debited to the account holding the open position. If you hold a position overnight you are credited/debited an interest charge for this.
Each currency has an interest rate associated with it. Therefore every FX trade incorporates two different interest rates. For example if you buy EURUSD you are using the Euro interest rate and the USD interest rate. If the Euro rate = 3.50% and the USD rate = 1.75%, you are buying the EURUSD so you will earn approx 1.75% annually. If you are short you will pay 1.75% annually.
HOW AVAFX CALCULATES ITS FX, GOLD & SILVER PREMIUM/SWAP RATES
We take an O/N rate (Overnight) for each currency; add/subtract our markup to create Bid & Ask premium/swap rates.
Example:O/N rate = 3.00%, BID = 3.00 – 0.3 = 2.70% / OFFER = 3.00 + 0.3 = 3.30%
With this Bid and Offer rate we then calculate the Premium/Swap.
Bid formula:
(Currency 2 Bid Interest Rate – Currency 1 Offer Interest Rate) X Current Spot Price X Lot Size
360 Days
Ask formula:
(Currency 2 Offer Interest Rate – Currency 1 Bid Interest Rate) X Current Spot Price X Lot Size
360 Days
The resulting figure from the above will be denominated in the second currency of the pair being calculated.
EURUSD Example:
O/N rate: EUR = 0.022%, BID = 0.022 – 0.3 = 0.28% / OFFER = 0.022 + 0.3 = 0.32%
O/N rate: USD = 0.13%, BID = 0.13 – 0.3 = 0.17% / OFFER = 0.13 + 0.3 = 0.43%
Bid:
(0.17%  0.32%) X 1.23289 X 5,000
360
= 0.08391 = $0.08
Ask:
(0.43%  0.28%) X 1.23289 X 5,000
360
= 0.121577 = $0.12
Note: The above figures are just examples
The Premium/Interest Charge for each FX instrument can be found on AvaTrade’s trading conditions,
http://www.avatrade.com/tradingconditions
NON FX (COMMODITY/INDEX/BONDS/ETF) PREMIUMS/SWAPS
If you hold a non  FX position after the daily business close, technically the position has been held overnight. This trade must be funded. Therefore a premium is either credited or debited to your account to cover the cost or the benefit of the associated funding.
Bid formula:
(Lot Size X Current Market Price) X Bid Markup
360
Ask formula:
(Lot Size X Current Market Price) X Ask Markup
360
The resulting figure from the above calculation will be denominated in the currency of the Instrument in question.
If you are using a USD, EUR, GBP or JPY account you then need to calculate the Premium/Swap into the currency of your account.
CRUDE OIL Example:
Crude Oil Bid Markup = 0.20% / Crude Oil Ask Markup = 0.50%
Bid:
(10 X 95.50) X 0.20%
360
= $0.01
Ask:
(10 X 95.50) X 0.50%
360
= $0.01
Note: The above figures are just examples
CAC 40 Example:
CAC 40 Oil Bid Markup = 0.50% / CAC 40 Ask Markup = 1.00%
Bid:
(1 X 3550) X 0.50%
360
= €0.05
Ask:
(1 X 3550) X 1.00%
360
= €0.10
Note: The above figures are just examples
EQUITY Example:
We take the 1 MONTH LIBOR Rate set by the British Bankers Association for each of our Equities denominated currency; we use this as the market interest rate and include our markup of 2.5% to create our Bid & Ask Premium/Swap rates for those equities
Example: 1M rate = 0.25%, BID = 0.25  2.5 = 2.25% / OFFER = 0.25  2.5 = 2.75%
Bid formula:
(Lot Size X Current Market Price) X Bid Markup
360
Ask formula:
(Lot Size X Current Market Price) X Ask Markup
360
The resulting figure from the above calculation will be denominated in the currency of the Instrument in question.
If you are using a USD, EUR, GBP or JPY account you then need to calculate the Premium/Swap into the currency of your account.
COCA COLA Example:
(10 X 35.00) X 2.75%
360
= $0.03
Note: The above figures are just examples
The Premium/Interest Charge for each nonFX instrument can be found on AvaTrade’s trading conditions, http://www.avatrade.com/tradingconditions
MARGIN REQUIREMENTS
All Instruments are traded on margin allowing you to leverage your positions.
Margin Requirements can be viewed in our Trading Conditions section here: http://www.avatrade.com/tradingconditions
Margin is either fixed at an amount per lot or at a percentage of the position value. For example, the margin required for FX positions is fixed at $25 per lot on the Ava Trader USD platform. That is, if you open a position of 5,000 EURUSD – it requires $25 of margin.
Margin requirements on certain instruments can increase with lot size.
MARGIN CALCULATION
All Ava Trader FX margins per lot are as stated in our Trading Conditions here:
http://www.avatrade.com/tradingconditions
All MT4 FX margins per lot are calculated at a ratio of 400:1 and in the secondary currency.
Example 1: 1 lot of EURUSD = 100,000 * 1.30 (EURUSD Rate)/400 = USD 325
Example 2: 1 lot of AUDCAD = 100,000 *1.02 (AUDCAD Rate)/400 = CAD 255
If you are using a USD account then the CAD 255 needs to be calculated in USD.
Example 3: 1 lot of USDJPY = 100,000 * 78 (USDJPY Rate) / 400 = JPY 19,500
If you are using a USD account then the JPY 19,500 needs to be calculated in USD.
All NonFX instruments on both Ava Trader and MT4 are calculated using % Margin.
Formula: Position Amount (Nominal*) X % Margin Requirement
*To calculate the Nominal Value of a position, multiply the lot size of a position by the open price.
CRUDE OIL Example:
Buy Trade for 100 barrels of Crude Oil = 100 * 98 (Crude Oil Rate) = $9,800 (Nominal)
Margin Requirement = $9,800 * 1% = $98
CAC 40 Example:
Buy Trade for 10 contract of CAC 40 = 10 * 3,500 (CAC 40 Price) = €35,000 (Nominal)
Margin Requirement = €35,000 * 2% = €700 = €700
The resulting figure from the above calculation will be denominated in the currency of the Instrument in question.
If you are using a USD, EUR, GBP or JPY account you then need to calculate the Margin into the currency of your account.
MARGIN CALLS
You must maintain an adequate amount of margin to maintain your positions, if your Equity Level drops to 10% of Used Margin, a Margin Call will occur on your account. It is the client’s responsibility to maintain a sufficient level of margin in their account.
Example:
In the above example a client can see exactly how a margin call can occur. The client here was long 100,000 USDCAD. The margin required to open this position was $500.00. As the price of USDCAD fell, the client loses more and more money. Eventually he lost enough money from his equity to leave his equity level below 10% of his used margin.
If the above condition (Equity < 10% Used Margin) happens to occur on a clients account then the following will occur:
 On the AVA TRADER platform, all positions in a client’s account will be closed.
 On the MT4 platform, the largest losing position in a clients account will be closed along with subsequent positions until the Equity Level returns above 10%.
TRADING HOURS
Instruments on the AvaTrade platform can trade at different market hours. The Trading Hours for an Instrument are listed in our Trading Conditions, http://www.avatrade.com/tradingconditions, and are shown in GMT.
During these hours client can Place or Modify orders, outside of these hours NO Trading or Modifications can be made to Orders.
QUOTED MONTHS/EXCHANGE
AvaTrade quotes the futures contracts on many of its non–FX instruments. On the AvaTrade trading conditions page, you can see which month’s contracts are available to trade on the AvaTrade website at the link: http://www.avatrade.com/tradingconditions
The trading of CFD futures contracts at AvaTrade is based on the underlying instrument and rollover data can be found at: http://www.avatrade.com/cfdrolloverdates
The trading of particular futures contracts are based on liquidity and volume of that particular month’s contract. Some instruments that are traded seasonally can have contracts of low liquidity and volume. AvaTrade can rollover these contracts without prior notification to the next available contract to maintain stable spreads and prices.
You can also check which listed exchange AvaTrade quotes its futures contract price from. This can be done from the trading conditions page under the exchange column at:
http://www.avatrade.com/tradingconditions
CFD ROLLOVERS
On many of its nonFX instruments AvaTrade trades the futures contract of an instrument. The contracts can expire monthly or quarterly.
You can find out each month which instruments are rolling over by checking the AvaTrade website:http://www.avatrade.com/cfdrolloverdates
When AvaTrade rolls maturing contracts over from the current tradable contract to the next tradable contract, an adjustment is made (via premiums) to your account to reflect the difference in price between the two contracts.
This adjustment is made to the account so your overall P/L will not be affected.
There is a charge of the standard spread to facilitate the rollover from the current contract to the new contract
CORPORATE ACTIONS
Dividend Adjustments: For any individual equity on the AvaTrade trading platform that declares a dividend, AvaTrade will make an adjustment to your account that holds said equity, at the end of the cumdividend day. This will be one day before the exdividend day.
The adjustment made to the account will be:
 Buy trades will be credited with 90% of the Net dividend.
 Sell trades will be debited with 100% of the Gross dividend.
Additional Corporate Actions: Rights Issue, Stock/Reverse Splits, Mergers, Acquisitions, Takeovers etc.
As these corporate actions can happen suddenly and without prior knowledge, Open Positions and Orders will be Closed/Deleted at the end of the cumaction day at market price on the particular equity.
INACTIVITY FEE
Customer acknowledges that the Customer’s trading account may be subject to inactivity fees unless prohibited by law.
After 6 consecutive months of nonuse (“Inactivity Period”), and every successive Inactivity Period, a $25 inactivity fee will be deducted from the value of the Customer’s trading account.