• How It Works
• Leverage
• Tight Spreads
• Guaranteed Stops

Example: Selling GBP/USD with a Guaranteed Stop

It is 8.30am on 2nd June 2008 and our rate for GBP/USD is 1.9650/1.9652. You feel the price of the pound will strengthen and decide to buy 1 contract (the equivalent of £100,000) with a Guaranteed Stop.

Your position is opened at 1.9652 plus 3 (the premium for the Guaranteed Stop) = 1.9655. You decide to put your Guaranteed Stop at 1.9610. So the most you can lose on the position (excluding interest adjustments) is (1.9655 x £100,000) - (1.9610 x £100,000) = $450.

Your view proves to be inaccurate and by 9.20am sterling has fallen already. Our rate has dropped to 1.9620/1.9622 and you think sterling may fall even more. Of course you don't have to wait for your Stop to be triggered, so you sell 1 contract at 1.9620 to close your position.

Your loss is (1.9655 x £100,000) - (1.9620 x £100,000) = $350.

To calculate the overall result you also have to include any daily interest adjustments.