How Many Units Can I Buy?

I’ll have to guess at some of the information you haven’t provided, specifically your account currency.

So, just to continue the conversation, and formulate an answer to your question, I’ll assume that your account currency is USD, and you are trading a US-regulated retail account (meaning 50:1 leverage limit and 2% required margin).

When you trade 100,000 units of ZAR/JPY (or any pair in which ZAR is the base currency), your position has a notional value of 100,000 ZAR.

To convert this to USD (your assumed account currency), we divide 100,000 ZAR by the current price of USD/ZAR, as follows:

Notional value in USD = 100,000 ZAR ÷ USD/ZAR

The current price of USD/ZAR is 13.7900, which means that 1 USD = 13.79 ZAR

Therefore, notional value in USD = 100,000 ZAR ÷ 13.79 = $7,251.63

In order to trade a $7,251 position size, your account must provide 2% required margin = $145.02

If you do a similar calculation for the AUD/CHF trade which you mentioned, you will determine that a 100,000 AUD position has a notional value in USD of $75,000 (at the current AUD/USD price of 0.7500).

That is, 100,000 units of AUD/CHF is worth more than 10 times as much as 100,000 units of ZAR/JPY. And, in order to trade 100,000 units of AUD/CHF (or any other pair in which AUD is the base currency), your account would have to provide required margin = $1,500.

That’s why you can trade 10 times [I]as many units[/I] of ZAR/JPY as AUD/CHF.

Note that this 10:1 ratio (based on [I]current prices[/I]) applies to any account, regardless of what the account currency is. I based my answer to your question on an account currency assumed to be USD, simply in order to do the math.

Second note: the [I]quote currencies[/I] in these trades do not figure into the calculations. So, we could say that you can trade 10 times [I]as many units[/I] of ZAR/XXX as AUD/YYY, regardless of what currencies XXX and YYY represent.

I hope that helps to clear things up for you.

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