Trading Crypto and Indices

Trading Cryptocurrencies and Indices can be tricky from time to time as there are different specifications for different instruments. In this article, we will take a look at some different nuances that every trader should know about trading Cryptocurrencies and Indices.

Contract size (lot size)

It is the standardized number of a financial instrument within 1 contract.

Cryptocurrencies

All our cryptocurrencies at FTMO have a contract size of 1 (BTC, ETH DASH, LTC). This means that if you own 1 contract on a cryptocurrency, a price change of 1 USD on the cryptocurrency would result in a PnL change of the position of also 1 USD.

 

Indices

Most indices at FTMO have a contract size of 10. This means that if you own 1 contract on an index with the contract size of 10, a price change of 1 point on the index would result in a PnL change of the position which is 10 times the amount denominated in the margin currency of the instrument.

*The margin currency of the instrument can be found in the “Specifications” tab in the trading platform. 

 

 

Point

A unit of price change as a whole digit. If an asset worth 100 USD rises to 101 USD, that is an increment of 1 point.

Point value

The value of a point based on the contract size of the instrument.

Example:

BTCUSD has a point value of  1 USD/point (contract size = 1, profit currency = USD) where 1 point is defined as the 1st digit before the fractal comma.

US30.cash has a point value of  10 USD/point (contract size = 10, profit currency = USD) where 1 point is defined as the 1st digit before the fractal comma.

Leverage and margin

Leverage allows you to trade with more money than you have on your account. FTMO offers maximum leverage of 1:100 on all account types. The margin requirements on individual instruments may vary. The exact specifications can be checked on the platform or at https://ftmo.com/en/symbols/.

In order to open and maintain a leveraged trade, you need to have a certain amount of money on the account. It is called margin. The higher the leverage you have on your account, the smaller the margin you will have to provide. You need to check the margin requirements in the Specification of the instrument in order to calculate the necessary margin.

Margin percentage 100% -> 1:100 / 100% = 1:100

Margin percentage 200% -> 1:100 / 200% = 1:50

Margin percentage 300% -> 1:100 / 300% = 1:30

Margin percentage 1000% -> 1:100 / 1000% = 1:10

 

At FTMO, the following formula is used for the calculation of margin for CFDs:

Margin = Lots * Lot size * Price of the instrument * Margin rate * Leverage of the account

Example:

Symbol: US30.cash
Margin rate: 200%
Leverage of the account: 1:100
Lot size: 10
Number of lots: 2

Margin =  2 (number of lots) * 10 (lots size) * 34 000 USD (price of the instrument) * 200% (margin rate) / 100 (leverage) = 13 600 USD

In order to buy 2 lots of US30.cash, you will need at least 13 600 USD to open the position.

In case your account has insufficient margin, the order will be rejected and you will receive a ‘not enough money’ alert.

Commission 

When you buy or sell an instrument, you do that through a broker/provider. The broker/provider charges you a transaction fee whenever you open a trade. The commission on Cryptocurrencies and Indices is based on the percent/volume. 

The calculation for the commission is as follows:
 

Commission = Lots size * lots * Price of the instrument * Commission in %

The commission specifications for each instrument can be found here: https://ftmo.com/en/symbols/. 

  • Crypto CFDs (BTCUSD, DASHUSD, ETHUSD and LTCUSD) have 0.0040% commission per volume.
  • Popular Indices (US100.cash, US500.cash, US30.cash, UK100.cash and GER30.cash) have 0.0010% commission per volume, while other Indices have 0.0040% commission per volume.

If the trade currency is not in the base currency of your account, the commission will be converted based on the exchange rate at the moment of opening the trade.

Calculations

  • Profit/Loss calculations for Crypto and Indices

To calculate the results of the trade (profit/loss) we need to know the Lot Size, the amount of price change Points, the Point value, the Commission, and the Swap, which can be all found in the trading platform. 

 

The formula for calculating Profit/Loss is as follows:

 

Profit/Loss =  (Lot size * Point Value) * Points + (Commission+Swap)

It is important to keep in mind the account base currency and the margin currency of the instrument when calculating Profit/Loss!

Please note that in order to calculate the lot size of the trade, you should know the amount you want to risk, Point Value and number of Points (trade movement- the difference between opening and closing price), and the currency of the traded account.

Examples:

 

I have a 100,000 USD account, 1% risk, 50 points Stop Loss on BTCUSD. What should be my lot size to only lose $1,000 on the trade?

Lot size = net Profit/Loss / (Point Value x Points) 

Point value = Contract Size = 1

Lot size= 1000 / (1 x 50) = 20 

Lot size = 20 

 

I have an 80,000 EUR account, 1 % risk, 50 points Stop Loss on BTCUSD, What should be my lot size to only lose 800 EUR on the trade?

Since the margin currency of BTCUSD is USD, we need to convert EUR to USD.

Lot size = net Profit/Loss / (Point Value x Points) 

Point value = Contract Size =1

800 EUR = 971.42 USD

Lot size = 971.42 / (1 x 50) 

Lot size = 19.42

As you can see, the account currency affects the lot size of a position.

 

What will be my Profit/Loss if I place a 5 lot trade on LTCUSD, considering my account is a 50,000 USD account, and the movement is 20 points?

Profit/Loss =  ((Lot size * Point Value) * Points) – (Commission+Swap)

Swap is 0

Commission= contract size * lots * market price * Commission in %=1*5*189.56*0.00004=$0.037 

Point value= Contract Size=1

Profit/Loss = [( 5 x 1) x 20] – (0.037+0) = 99.96 USD

 

What will be my Profit/Loss if I place a 5 lot trade on LTCUSD, considering my account is a 35,000 GBP account, and the movement is 20 points?

Profit/Loss =  ((Lot size * Point Value) * Points) – (Commission+Swap)

Point value= Contract Size=1

Swap is 0

Commission= contract size * lots * market price * Commission in %=1*5*189.56*0.00004=$0.037

Profit/Loss = [( 5 x 1) x 20) – (0.037+0] = 99,96 USD =  82.32 GBP 

Since the account currency is GBP, we need to convert the profit to GBP.

 

I have a 100,000 USD account, 2% risk, 30 pip Stop Loss on US100.cash. What should be my lot size to only lose $2,000 on the trade?

Lot size= net Profit/Loss / (Point Value x Points) 

Lot size= 2000 / (10 x 30) = 6.66

Lot size =6.66

 

I have a 70,000 GBP account, 2% risk, 30 pip Stop Loss on US100.cash. What should be my lot size to only lose 1,400 GBP on the trade?

Since the margin currency of US100.cash is USD, we need to convert GBP to USD.

Lot size= net Profit/Loss / (Point Value x Points) 

1400 GBP = 1937.15 USD

Lot size = 1937.15 / (10 x 30) = 6.46

Lot size = 6.46

 

I have an 80,000 EUR account, 2% risk, 30 pip Stop Loss on AUS200.cash. What should be my lot size to only lose 1,600 EUR on the trade?

Since the margin currency of AUS200.cash is AUD, we need to convert EUR to AUD.

Lot size= net Profit/Loss / (Point Value x Points) 

1600 EUR =2501.20 AUD

Lot size = 2501.20 / (10 x 30) = 8.34

Lot size = 8.34

 

Profit/Loss calculation 

 

What will be my Profit/Loss if I place a 10 lot trade on US30.cash, considering I have a 50,000 USD account, and the movement is 40 points?

Profit/Loss =  (Lot size * Point Value) * Points

Point value= Contract Size=10

Swap is 0

Commission= contract size * lots * market price * Commission in = 10*10*31500.90*0.00001=$31.50

Profit/Loss = [(10 x 10) x40] – (31.50+0) = 3968.50 USD 

 

What will be my Profit/Loss if I place a 10 lot trade on US30.cash, considering I have a 40,000 EUR account, and the movement is 40 points?

Profit/Loss =  (Lot size * Point Value) * Points

Point value= Contract Size=10

Swap is 0

Commission= contract size * lots * market price * Commission in = 10*10*31500.90*0.00001= $31.50

Profit/Loss = [(10 x 10) x40] – (31.50+0) = 3968.50 USD, which 3268.20 EUR

Since the account base currency is EUR, the Profit will be 3268.20 EUR.

 

What will be my Profit/Loss if I place a 10 lot trade on AUS200.cash, considering I have a 70,000 GBP account, and the movement is 40 points?

Profit/Loss =  (Lot size * Point Value) * Points

Point value= Contract Size=10

Swap is 0

Commission= contract size * lots * market price * Commission in = 10*10*6848.90 *0.00004= 27.49 AUD

Profit/Loss = [(10 x 10) x 40] – (27.39+0) = 3972.61 AUD, which is 2230.13 GBP.

Since the account base currency is GBP, the Profit will be 2230.13 GBP.