MF Global

24-Hour Market

The FX market is a seamless 24-hour market. The spot FX market is unique to any other market in the world, as trading is available 24-hours a day. Somewhere around the world, a financial centre is open for business, and banks and other institutions exchange currencies, every hour of the day and night with generally only minor gaps on the weekend. Essentially foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day.

The MF Global dealing desk is open from Monday at 7am AEST until Saturday 9am AEST. With the ability to trade during the Asian, European and U.S. market hours, traders have the advantage of customising their own trading schedule.

Rapid Execution of Market Orders

MF Global prides itself in offering the best execution possible in all market conditions. MF Global offers rapid execution and price certainty on every market order under normal market conditions.

Short-Selling without an Up-tick

Unlike the equity market, there is no restriction on short selling in the currency market. Trading opportunities exist in the currency market regardless of whether a trader is long or short, or which way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. Hence, a trader has an equal access to trade in a rising or falling market.

Types of Orders

When trading Margin FX markets traders are able to place sophisticated orders from market orders, entry orders, stop/limit entry orders, and stop-loss orders. All of the above orders are Good Until Cancelled (GTC), which is valid until the order is executed or cancelled.

Quoting Conventions

Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The first listed currency is known as the base currency, while the second is called the counter or quote currency. The base currency is the "basis" for the buy or the sell. For example, if you BUY EUR/USD you have bought Euros (simultaneously sold Dollars). You would do so in expectation that the Euro will appreciate (go up) relative to the US Dollar.

Currency Abbreviations

AUD / USD

In this example Aussie is the base currency and thus the "basis" for the buy/sell. If you believe that the US economy will continue to weaken and this will hurt the US Dollar, you would execute a BUY AUD/USD order. By doing so you have bought AUD in the expectation that it will appreciate versus the US Dollar. If you believe that the US economy is strong and the AUD will weaken against the US Dollar you would execute a SELL AUD/USD order. By doing so you have sold Aussie in the expectation that it will depreciate versus the US Dollar.

USD / JPY

In this example the US Dollar is the base currency and thus the "basis" for the buy/sell. If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S Dollars in the expectation that it will appreciate versus the Japanese Yen. If you believe that Japanese investors are pulling money out of U.S. financial markets and repatriating funds back to Japan, and this will hurt the US Dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S Dollars in the expectation that it will depreciate against the Japanese Yen.

GBP/USD

In this example the GBP is the base currency and thus the "basis" for the buy/sell. If you think the British economy will continue to be the leading economy among the G7 nations in terms of growth, thus buying the Pound, you would execute a BUY GBP/USD order. By doing so you have bought Pounds in the expectation that it will appreciate versus the US Dollar. If you believe the British are going to adopt the Euro and this will weaken Pounds as they devalue their currency in anticipation of the merge, you would execute a SELL GBP/USD order. By doing so you have sold Pounds in the expectation that it will depreciate against the US Dollar.

Cross Rates

Other than the major currencies, MF Global also gives you access to trade in cross rates. Cross rates are rates that are not quoted against the USD. Examples are EUR/AUD, AUD/JPY, AUD/NZD, AUD/GBP, EUR/JPY, EUR/CHF, EUR/GBP, GBP/CHF, GBP/JPY, NZD/JPY, NZD/CAD, etc. The combination possibilities are extensive and this enables our clients to take any trading opportunities as they arise.

Buying / Selling

First, the trader should determine whether they want to buy or sell. If they want to enter a short order – whereby they will profit if the exchange rate falls. The opposite holds true for traders who enter buy orders, profiting if the exchange rate goes up.

Dealing prices quoted to you are those prevailing in the interbank foreign currency market. When you request a price, you simply call MF Global and you will be quoted both a “bid” and “offer” price in line with the interbank market. You are gaining access to the professional currency market at the wholesale dealing spreads without the need to be a major corporation, bank or financial institution and without the need for bank credit lines.

Trade Size

With MF Global all trades are executed in standard sizes of a minimum of 100,000 base currency. Here are some examples:

• U.S. Dollar / Japanese Yen (100,000 U.S. Dollars)
• AUD / U.S. Dollar (100,000 AUD)
• Euro / Great Britain Pound (100,000 Euros)
• Euro / Japanese Yen (100,000 Euros)