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April 13, 2016

Question:What are the trading conditions of Index CFDs in LMFX MT4?

Answer:

You may want to look into the contract specification table in LMFX’s official website before you start trading as there should be all information you may need for trading with LMFX.

LMFX offers 13 different Index CFDs with MT4.

you don’t need to open an another different account to trade Index CFDs and other trading instruments together, but you are able to trade all the instruments in one account.

LMFX Official Website

Swaps of Index CFDs

There will be swap charges if you hold an open position through over night(server time 00:00) and it is decided by the liquidity providers of LMFX.

The swap points are not fixed so you may get charged or credited every night as long as you don’t close the positions at that time.

Although, the swap charge occurs at server time 00:00, the process may take a few minutes so the time is not so precise.

Swaps for weekends

One thing you will need to be careful is that the swap charge on the weekends(Saturday and Sunday) will be charged on Friday nights but not Wednesdays.

Tripled swap on Fridays are only for Index CFDs and other financial instruments(Forex pairs, Stock CFDs, Commodities and Precious Metals) will have the tripled swap charge on Wednesdays.

Dividend as swaps

LMFX will allow any corporate action resulting in funds being transferred to shareholders. It is called a bonus or dividends and your account will be credited for this bonus(dividend) if you have long position and charged for this bonus(dividend) if you have short position of an Index CFDs.

These dividends are subject to change at anytime depending on the corporate actions.

These dividends will be charged as swaps to your account, according to the swap(dividend) points.

LMFX Official Website

Required margin for Index CFDs

Please note that the leverage you have set in your account is not applicable for trading of Index CFDs.

LMFX may require fixed margin for Index CFDs  and it is from 50 to 400 USD.

The followings are the margin requirement for each Index CFDs:(4/2016)

 Index CFDs Margin Requirement Contract Size
 AUS200 200 USD per 1 lot 1
 USD Index 200 USD per 1 lot 1
 USA500 160 USD per 1 lot 1
 USA30 100 USD per 1 lot 1
 USA100 50 USD per 1 lot 1
 UK100 200 USD per 1 lot 1
 SUI20 200 USD per 1 lot 1
 SPA35 200 USD per 1 lot 1
 SHCOMP 300 USD per 1 lot 1
 ITA40 400 USD per 1 lot 1
 HKG33 300 USD per 1 lot 1
 GER30 200 USD per 1 lot 1
 FRA40 200 USD per 1 lot 1

The contract size is 1 for all symbols above.

Trading commissions

LMFX will charge you 2 dollars per 1 lot for trading Index CFDs.

This commissions will be charged along with the spread, so you will need to cover the spread and 2 dollars per 1 lot extra commissions.

For the standard spread of Index CFDs, please refer to the followings:

 Index CFDs Spread Trading Commissions
 AUS200 2 pip 2 USD per 1 lot
 USD Index 11 pip 2 USD per 1 lot
 USA500 0.5 pip 2 USD per 1 lot
 USA30 4 pip 2 USD per 1 lot
 USA100 2 pip 2 USD per 1 lot
 UK100 1 pip 2 USD per 1 lot
 SUI20 4 pip 2 USD per 1 lot
 SPA35 10 pip 2 USD per 1 lot
 SHCOMP 20 pip 2 USD per 1 lot
 ITA40 20 pip 2 USD per 1 lot
 HKG33 15 pip 2 USD per 1 lot
 GER30 2 pip 2 USD per 1 lot
 FRA40 1 pip 2 USD per 1 lot

Please note that the spreads above are not necessarily fixed at all times, but it could get wider depending on the volatility in the financial markets.

Market hours of Index CFDs

The market hours of Index CFDs are not 24 hours like Forex pairs, but the times are different for each Index CFD.

Please refer to the followings:

 Index CFDs Trading Hours(GMT+2) Breaking Hours(GMt+2)
 AUS200 Daily 00:50 – 23:00 None
 USD Index Mon 01:00 – Fri 23:15 Daily from 23:15 until 23.30
 USA500 Mon 01:00 – Fri 23:15 Daily from 23:15 until 23.30
 USA30 Mon 01:00 – Fri 23:15 Daily from 23:15 until 23.30
 USA100 Mon 01:00 – Fri 23:15 Daily from 23:15 until 23.30
 UK100 Daily 09:00 – 23:00 None
 SUI20 Daily 08:50- 18:25 None
 SPA35 Daily 10:00 – 18:30 None
 ITA40 Daily 10:00 – 18:40 None
 HKG33 Daily 04:15 – 11:15 Daily 07:00 – 08:00
 GER30 Daily 09:00- 23:00 None
 FRA40 Daily 09:00 – 23:00 None

OTC environment for Index CFDs

In the real market of Index CFDs you can not sell and make profits, as you can either buy and open a position or close the positions.

But Index CFDs offered by LMFX are OTC derivatives, For the trading of Index CFDs, LMFX will become a market maker for traders and cover all the orders.

This means that LMFX is hedging your positions and there is a conflict of interest in that terms.

LMFX has been active for a few years and no one has ever posted a review mentioning a trouble with LMFX though(as far as we can see), it is g^an useful information to know if a financial instrument is OTC or STP.

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