INVESTMENT OPPORTUNITY IN FOREX, FOREX OPTIONS & COMMODITY MARKETS SINCE 1988.


FOREX BROKER
FOREX OPTIONS BROKER
COMMODITY FUTURES BROKER


FREQUENTLY ASKED QUESTIONS

1.  What is forex?
2.  Where is the central location of the forex market?
3.  Who are the participants in the forex market?
4.  What are the most commonly traded currencies in the forex market?
5.  How are currency prices determined?
6.  When is the FX market open for trading?
7.  What is the difference between an "intraday" and "overnight position"?
8.  How is risk managed?
9.  What margin rates are required to open (purchase/sell) and hold (maintain) a position?
10.  Will I be assigned a broker to work with or can I choose one that I prefer?
11.  How much money do I have to keep in my account once it is open?
12.  What account fees do I have to pay?  What about commissions?
13.  How quickly can I open an account and how soon can I begin trading?
14.  How fast can I expect my fills to be returned to me?
15.  Where are my funds held?
16.  How do I deposit or withdraw money from my account?
17.  Can I transfer an account from another firm to CFOS/FX?
18.  Can I assign CFOS/FX the right to trade a system on my behalf for my account?
19.  Does CFOS/FX offer brokerage services in commodity futures markets?
20.  Is Commodity Futures and Options Service, Inc. registered and regulated?
21.  What is CFOS/FX's policy regarding the privacy of client information?

 

  1. What is Forex?

    The off-exchange retail foreign currency market, also referred to as the "foreign currency," "forex" or "fx" market, are traded in pairs, for example Euro/U.S. Dollar or U.S. Dollar/Yen.  Forex is simply the simultaneous purchase of one currency and selling of another. 

  2. Where is the central location of the forex market?

    Forex trading is not centralized on an exchange, as with the stock and futures markets.  The forex market is considered an over-the-counter (OTC) or off-exchange market, due to the fact that transactions are conducted directly between two counterparties over an online trading platform, electronic network or via the telephone.

     

  3. Who are the participants in the forex market?

    CFOS/FX customers trade directly with the carrying FCM/Dealer for forex trading.  Therefore, CFOS/FX customers are not direct participants in the true interbank market, because the respective FCM/Dealer holding the customer's funds provides the quotes and acts as counterparty to customer trades. CFOS/FX customers are actually participating in the off-exchange retail forex market, which is only a small portion of the overall forex market - and is NOT the true interbank market.

     

  4. What are the most commonly traded currencies in the forex market?

    The most often traded or "liquid" currencies are those of countries with stable governments, respected central banks and low inflation.  Most forex transactions involve trading of the "major" currencies which include the US Dollar, Japanese Yen, Eurocurrency, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar.

     

  5. How are currency prices determined?

    Currency prices are affected by a variety of economic and political conditions, the most important of which are interest rates, inflation and political stability.  Moreover, governments sometimes participate in the forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price.  This is known as central bank intervention.  Any of these factors, as well as large market orders, can cause high volatility in currency prices.  However, the size and volume of the forex market makes it virtually impossible for any one entity to "drive" the market for any length of time.

     

  6. When is the forex market open for trading?

    Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York.  The forex market is typically open 24 hours a day from Sunday 4pm ET until Friday 4pm ET, except on scheduled holidays (exact times may vary by FCM/Dealer).

     

  7. What is the difference between an "intraday" and "overnight" position?

    Intraday positions are all positions opened and subsequently closed anytime during the 24 hour trading period.  Overnight positions are positions that are still open at the end of normal trading hours (typically 4:00 pm CST), which are automatically "rolled-over" (based on the currencies' interest rate differentials) to the next day's price.

     

  8. How is risk managed?

    The most common risk management tools in forex trading are the limit order and the stop-loss order. Disclosures explaining the limitation of stop and limit orders (such as no guarantee as to fill price and the risk of trading during fast markets) can be found on our order types webpage. Forex options are also commonly used to help manage and/or hedge risk exposure. 

  9. What margin rates are required to open and maintain a position?

    CFOS/FX customer margins are generally 50:1 for underlying spot transactions (depending on what type of account you open and the particular FCM/Dealer), and may be much greater leverage for options contracts.*  This means that investors can execute trades worth $100,000 with an initial margin requirement of $2,000.  However, if an account balance breaches the "maintenance margin" requirement the FCM/Dealer, at its sole discretion, may close (offset) any and all open positions at the current rate.  At the discretion of the FCM/Dealer, maintenance margin rates may be increased from time to time, especially before a weekend or holiday, to account for unexpected price volatility that can occur while the markets are closed.  If you are unsure how forex spot and options margins work, please click here.

     

  10. Will I be assigned a broker to work with or can I choose one that I prefer?

    As forex accounts are generally self-directed, no broker will be assigned to you. Generally, any broker you speak or correspond with is capable of assisting you with any questions that you may have.

     

  11. How much money do I have to keep in my account once it is open?

    Once your account is open, there is no minimum balance requirement beyond the margin rates for any positions held in your account.

     

  12. What fees do I have to pay?  What about commissions?

    None, generally.  CFOS/FX and the respective FCM/Dealer are compensated through the bid/ask spread.  However, some FCMs/Dealers may charge for outgoing wire transfers and some may charge a ticket fee for small transactions - such charges will vary by FCM/Dealer.

     

  13. How quickly can I open an account and how soon can I begin trading?

    Depending on the FCM or dealer, new accounts can be opened and ready to trade in as little as 1-5 hours (with funds wired into the account).

     

  14. How fast can I expect my fills to be returned to me?

    For online accounts, market order fills are returned to you instantaneously.  If you are placing a market order via telephone with a broker, often you can have your fill back while you hold.  Fill reporting times may vary depending on the type of order placed and the condition of the market when your trade is executed.

     

  15. Where are my funds held?

    Forex accounts are held in the name of the respective FCM/Dealer.  Unlike commodity futures markets, forex account funds are not required to be maintained in a customer segregated account and, therefore, forex customer funds may not receive such protections afforded to customer-segragated accounts.

     

  16. How do I deposit or withdraw money from my account?

    This will vary by FCM/Dealer.

     

  17. Can I transfer an account from another firm to CFOS/FX?

    Yes, you can. Simply complete a transfer request form and complete the new account form.  Contact us for details.

     

  18. Can I assign my CFOS/FX broker the right to trade a particular system on my behalf for my account?

    Yes. However, each trading system has different requirements and CFOS/FX reserves the right to accept or refuse to trade a system on behalf of a client.  Each system will be reviewed on a case-by-case basis.

     

  19. Does CFOS/FX offer assistance for traders who want to invest in regulated futures markets?

    Yes.  CFOS/FX is a division of Commodity Futures and Options Service, Inc., an independent Introducing Broker in the commodity futures markets.  CFOS has long-standing clearing relationships with the following FCMs (FCM's): MF Global, Alaron and R.J. O'Brien.  Contact us for details or visit the CFOS/FX Futures website.

     

  20. Is Commodity Futures and Options Service, Inc. registered and regulated?

    Yes, Commodity Futures and Options Service, Inc. is registered with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA).  NFA ID #0210781

     

  21. What is CFOS/FX's policy regarding the privacy (non-disclosure) of client information?

    The confidentiality of client information is strictly enforced at all times and we will never exchange, sell or give away any of your personal information.  Please review our Privacy Policy for more details.

     

*Highly leveraged forex trading can lead to large losses as well as gains.  Risk Disclosures

 

 

 

 

CFOS/FX SITE MAP

     
Open an Account

Free Demo Accounts

Contact Us

About CFOS/FX
Company Profile
Management Profiles
Employment/Branches
Contact Us

Other Services
Tax-deferred IRA Accounts
Hedging & Consulting Srvcs
CTA & Fund Manager Srvcs

Commodity Futures Trading

Forex Options & Spot
Introduction to Forex
Trading Forex Spot
Trading Forex Options
Key Forex Fundamentals
Forex Pip & P/L Calculation
Forex Rollover Calculation
Types of Account
Types of Orders
How Margins Work
Benefits of Forex
Risk Management & Hedging
Forex FAQ's
Getting Started

Managed Accounts
Managed Accounts Main Page
Victor Asset Management, LLC
Trading Resources
Quotes & Charts
Research/Recommend's
Trading/Market Info. Links
Technical Analysis Indicators
Fundamental Analysis
21 Free Trading Strategies
Phone Etiquette
The Order Process
Trading Rules
Economic Calendar
Trading Glossary
System Specifications

Education
Forex for Beginners
Experienced Forex Traders
Advice for Traders

Disclaimer: Forex options trading and forex spot trading carry a high level of risk and are not suitable for everyone.  The possibility exists that you could sustain a loss of all or more of your forex trading investment.  Before trading forex options or spot markets you should be aware of all risks associated with forex trading.  For more information about the forex option trading risks, forex spot and online forex trading risks please contact a CFOS/FX forex option broker to discuss online forex option trading and spot trading risks in detail.  CFOS/FX is a forex option broker and forex spot broker offering online forex trading platforms in both spot forex and forex option trading markets.  The brokers at CFOS/FX broker forex spot and broker forex option trading for retail and commercial forex clients.  CFOS/FX acts only as a forex introducing broker and does not actively manage forex trading accounts for clients.  Regarding forex counterparty, CFOS/FX is a forex option broker and spot forex broker acting an forex introducing broker and not as counter-party for client forex spot trading or forex option trading.  The respective FCM/Dealer holding client funds acts as counterparty.

 
© Copyright 1988-2009 CFOS/FX - A Division of Commodity Futures & Options Service, Inc.  All Rights Reserved.