| Q1. |
Who can operate a Foreign Exchange Margin Trading Classic Account? |
| Q2. |
How is the account being operated? |
| Q3. |
How do I benefit from opening a Foreign Exchange Margin Trading Classic Account? |
| Q4. |
Will I have difficulty in obtaining a price for opening and closing out my foreign exchange position? |
| Q5. |
Is there a time limitation for me to close out my foreign exchange positions? |
| Q6. |
How is interest calculated? |
| Q7. |
What risks do Foreign Exchange Margin Trading Classic Account holders face? |
| Q8. |
How can I manage risk? |
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|
| Q1 |
Who can operate a Foreign Exchange
Margin Trading Classic Account? |
| |
Anyone 21 years
of age or older with a USD5,000 (or its
equivalent) deposit can open a BEA Foreign
Exchange Margin Trading Classic Account.
You have a choice of nine types of foreign
currency for the margin deposit: |
| |
 |
Australian dollar |
|
British pound |
|
Canadian dollar |
|
Euro |
|
Hong Kong dollar |
|
Japanese yen |
|
New Zealand dollar |
|
Swiss franc |
|
US dollar |
|
|
| Q2 |
How is
the account being operated? |
| |
Spot foreign exchange
contracts can be bought or sold (including
short sale) for up to 20 times the value
of your margin deposit. These transactions
do not involve the physical movement of
funds and are on non-delivery basis.
Upon closing of your foreign exchange position,
the net balance representing your profit
or loss is credited or debited from your
Margin Trading Account. |
|
| Q3 |
How do
I benefit from opening a Foreign Exchange
Margin Trading Classic Account? |
| |
If, in the near
future, you are expecting to receive foreign
currencies or need to make some payments,
you can use this facility to lock in the
current exchange rate. In this way,
you will protect yourself from subsequent
market fluctuations.
Adventurous investors can use the account
to trade in currencies they expect to experience
a rate rise or decline.
If you are a more strategic investor, this
facility enables you to combine profits
on expected currency movement together with
the interest yield differential between
two currencies. |
|
| Q4 |
Will I
have difficulty in obtaining a price for
opening and closing out my foreign exchange
position? |
| |
No. This
facility offers you the convenience of trading
by telephone. That is, you can do
it anywhere, at home or in the office.
With a mobile phone, you can even make transactions
while on the move. BEA will at all
times quote a buying and selling price based
on the prevailing inter-bank spot market. |
|
| Q5 |
Is there
a time limitation for me to close out my
foreign exchange positions? |
| |
You
may open and close out any foreign exchange
position on the same day or carry an open
position longer than a day. This is
because BEA will pay you interest on the
long currency position and finance your
short currency position. Technically,
your outstanding position is always on value
spot basis. Therefore, it is unnecessary
for you to have any roll-over or settlement
of maturing contracts; you may hold the
position without any time constraints. |
|
| Q6 |
How is
interest calculated? |
| |
Interest is paid
or charged to your Margin Trading Account
at the end of each month at the respective
currencies’ interest rates on:
1) Daily credit / debit balance of the Margin
Trading Account.
2) The daily net long / short currency position
(i.e. credit / debit leverage currency balance). |
|
| Q7 |
What risks
do Foreign Exchange Margin Trading Classic
Account holders face? |
| |
The only major
risk in establishing a foreign exchange
position is the fluctuations in the exchange
rates. A rise in the value of the
currency you purchased will increase your
earnings. However, there is also a
possibility that the currency’s exchange
rate could move adversely and take the value
of your position along with it. |
|
| Q8 |
How can
I manage risk? |
| |
To assist you
to better manage your risk, we offer you
online inter-bank spot rate quotations to
help you get in and out of a position quickly
and efficiently. The convenience of
extended trading hours from 8:00 a.m. to
2:30 / 3:30 a.m. and the facility structure
provide you with a high degree of flexibility
in managing your portfolio according to
your strategy and risk appetite. |
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