1. What is the leverage?
Leverage is the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. Prior to exploring leverage and how it is used in trading with Cooper Markets, please carefully read the following Risk Warning on Leverage:
LEVERAGE AMPLIFIES POTENTIAL LOSSES OR GAINS. WITHOUT PROPER USE OF RISK MANAGEMENT, THE HIGH DEGREE OF LEVERAGE MAY LEAD TO LARGE LOSSES.
Cooper Markets offers variable levels of leverage depending upon account type and account balance. The amount of leverage offered is as low as 1:1 and as high as 500:1. The following table is used in defining the different levels of margin available with Cooper Markets:
50:1 = 2%
100:1 = 1%
200:1 = 0.5%
300:1 = 0.33%
400:1 = 0.25%
500:1 = 0.2%
As noted above, the leverage available will differ depending upon account type and account balance.
2. Does leverage affect pip value?
The pip value does not change based on the leverage. It’s all based on the contract size.
3. What is the broker hours used by your server?
Our servers are set up on GMT+8 (GMT+3 from March to November and GMT+2 from November to March). Please check this link for detailed information on Trading hours: Trading > Trading Conditions > Trading hours.
4. Is Cooper Markets running dealing desk model?
No. CP Markets is a 100% straight-through processing brokerage firm with no dealer intervention whatsoever.
5. What is your margin call policy?
Cooper Markets has instituted a Margin Call Policy to protect the customer from losing more money than he/she may have available in his/her account, whilst also protecting the interest of our company. Margin calls are executed when an account has less equity available than required to maintain the customer’s open positions. Margin calls are activated in real-time on an automatic basis, and occur when an account’s equity (liquidation value) reaches a level that is equivalent to 100% of used (open) margin. This 100% is known as the maintenance level. Using our company’s MT4 trading platform, positions are closed prior to the market having a chance to move further against a customer’s open trades.
For example, let’s assume you open an account with USD1, 000 and open five 10,000 unit lots (50,000 units) of USD/CHF using 100:1 (1%) leverage. As a result, 1% of 50,000 or USD500 will be set aside as used margin, and you will have USD500 remaining as usable margin. If the direction of the USD/CHF moves opposite your position, and your equity (liquidation value) reaches USD150 from the original USD1, 000 deposit, this would breach the 30% maintenance level. As a result, the position will be automatically closed in order to protect you from losing any more of your remaining balance, and possibly falling into negative territory.
The MetaTrader4 platform uses the following formula in calculating an account’s margin level: (Account Equity / Used Margin) x 100 = Margin Level %
In addition, two other safeguards are in place to protect both the customer and our Company alike. Once an account’s margin level falls to or below 100%, the customer will only be able to enter orders to hedge his/her current position(s). Furthermore, once an account’s margin level falls to or below 50%, the customer will not be able to enter any new positions. Instead, the customer will only be able to exit the current position(s).
Our MetaTrader4 system may close any or all open positions in your account in the event that the account falls below the minimum required equity. Generally, when there are two or more open positions we reserve the right to close the position(s) first with the highest floating loss on a highly volatile market when the equity reaches 30% of used or open margin. In general, the largest positions are closed prior to the smaller positions. However, the MetaTrader4 system may close only the positions that carry the most risk. Even though the MetaTrader4 trading platform keeps track of used and free margin, it is always the customer’s responsibility to keep track of his/her account balance(s) at all times.
6. How can I protect myself from triggering a Margin call?
Our MT4 platform is designed to trigger 100% Margin Call if your account equity is equal to the margin. To prevent margin call you can fully hedge all positions in your account. Only an account that is fully hedged is 100% protected from incurring the Margin Call.
Therefore, if you are long (buy order) 1.5 lots on the EURUSD, to fully hedge these positions you would need to get short (sell order) 1.5 lots on the EURUSD.
Note in the above example, if you were to get short (sell order) 1.4 or 1.6 lots, you would not be fully hedged, but instead would be partially hedged. While partially hedged positions have less risk of triggering margin call, they are not 100% protected from it as are fully hedged positions.
7. Is scalping available?
8. Is hedging available?
9. Do you offer swap-free (Islamic) accounts?
Yes. When creating MT4 trading accounts, select the option box from Standard to Swap-Free.