
10-03-2009, 04:41 PM
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Master Contributor and Member
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Join Date: Nov 2008
Location: Houston,Texas
Posts: 307
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This is what the have posted on there websit regarding the comiss.
MB Trading - Stocks Options Futures Forex Online Discount Trading
Quote:
Fixed spreads are a way for Traditional Forex FCMs (Futures Commission Merchants) to mark up or mark down the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense should tell you that no one really offers commission-free trading, so when you see an FCM claim they have "no commissions," that should be a red flag. So how are they getting paid? It's simple, they're making money by building a markup/markdown into the spread.
Our FCM MB Trading Futures, Inc. has nothing to hide. We offer true, tight spreads with no markups/markdowns and openly display a low commission rate. Commissions are based on total dollar amount of the executed order at the rate of $0.50 per 10,000 traded, each side. There are four types of commission calculations one must perform, demonstrated by the following four examples to buy 10 lots.
Keep in mind that for most "exotics" e.g. EUR/CHF (3rd example), you must refer to the base currency's relationship to the US dollar (i.e. the base currency is EUR and the cross currency is USD; EUR/USD). Where there is none, e.g. CHF/JPY (4th example), CHF/USD does not exist, therefore use the US dollar based pair (USD/CHF) instead.
1. USD/JPY - US dollar based currency
US dollar based pairs: $0.50 per 10,000 currency.
Formula: Deal Size x 0.00005
10,000 currency (1 lot) x $0.00005 = $0.50 commission
2. EUR/USD - Non-US dollar based currency
Use EUR/USD's purchase price:
Formula: Deal Size x Deal Rate x 0.00005
10,000 currency (1 lot) x $1.3310 x $0.00005
$0.666 = $0.67 commission
3. EUR/CHF - Exotic: US dollar is available as cross currency (EUR/USD)
Use EUR/USD's current rate at the time the position is opened for EUR/CHF, keeping in mind that with an exotic, we reference the base currency's relationship to the US Dollar:
Formula: Deal Size X Deal Rate of EUR/USD X 0.00005
10,000 currency (1 lot) x $1.3310 x $0.00005
$0.666 = $0.67 commission
4. CHF/JPY - Exotic: US dollar cross (CHF/USD) isn't available but base is (USD/CHF)
Since CHF/USD does not exist, use USD/CHF, and since USD is the base currency, use the same formula as example #1 above.
Formula: Deal Size x 0.00005
10,000 currency (1 lot) x $0.00005 = $0.50 commission
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