Profit and Loss Calculation
(Selling Price – Buying Price) x Contract Size x No. of Contracts +/- Interest – Negotiable Commission Fees
The first day, customer sold 3 contracts of Euro at US$ 1.44
The next day, customer bought 3 contracts of Euro at US$ 1.43 in order to close/settle the open position.
Assuming short positions in charge investors an annual interest rate 2% and the closing price of this contract is 1.44 USD.
Profit: (1.44 – 1.43) x 3 x 125,000 = 3,750 U.S. Dollars
Interest: 125,000 x 3 x 1.44 x 2% x 1 day / 360 days = 30 U.S. Dollars
Total Profit = Profit + Interest = 3,780 U.S. Dollars
The profit and loss of each forex contract will be firstly calculated in USD on settlement day. After deducting specific commission, it will be settled in the client's account.