questions about Forex

[mikey74]

Hi,

I am kinda of a noob trading with Forex.
I am using Interactive Brokers but never traded the Forex there yet.
Do I understand it correctly that the leverage is 20?
So if I open a position on the EUR.USD, my "margin" is 1000$ for 1 position of 20K $?
And 1 pip is then 2 $?
Hope someone can clear this for me, thanx in advance!

regards Mik
(sorry for my bad englisch)

 

[Rhody Trader]

I don't know what IB's leverage setting is, but if it is indeed 20:1 then:

If you put on a 20k EUR/USD position your margin will be the EUR/USD rate x 20k divided by 20. So, if EUR/USD is 1.30 then the marging would be ( 1.3 x 20,000)/20 = 1300. Margin is based on the value of the trade not the size.

And yes, the pip value of a 20k EUR/USD position would be $2.