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May 6, 2016

Question:What is the trading condition of US Dollar Index KVB Kunlun's MT4?

Answer:

USDX stands for US Dollar Index.

KVB Kunlun offers you USDX in a form of CFD through its advanced trading platform, Forexstar.

The main conditions of USDX are as follows:

 Underlying Security(instrument) US Dollar Index
 Contract Size $1,000 US Dollar Index Value
 Maximum Leverage 1:20
 Margin Requirement 5%
 Normal Spread 0.07 index point
 Minimum Fluctuation Value 10 USD
 Minimum/Maximum Trading Size 0.01  – 10 lots
 Trading Hours 01:00 – 22:00 Monday – Friday in GMT time(DST applies)

KVB Kunlun Official Website

USDX as CFD

USDX provided by KVB Kunlun is a CFD(contract for difference) product.

Unlike the real Stock Index tradings, you can speculate the different price in the future and earn profits from the different prices.

The benefit of trading CFD is that you can also earn profit from falling prices.

It is because CFD is a OTC(over the counter) product, and the broker(in this case KVB Kunlun) allows you to sell Stocks and Indices so you can benefit from the conditions.

As it is a OTC Derivative, you are just trading prices which based on the underlying product, with KVB Kunlun. But you will not have the actual ownership of the underlying instruments.

Limited Leverage

Leverage is limited to 1:20 in case of Stock Index CFDs tradings.

Even if you have set the highest leverage(1:200) in your trading account, the leverage applied on Stock Index CFDs are always limited to 1:20 or less.

Leverage and contract size are different from other financial instruments, so you may want to make sure that you know the margin requirement before placing orders.

KVB Kunlun will close(liquidate) all open positions if the margin level goes below 50% in order to avoid further losses.

KVB Kunlun Official Website

Latency Arbitrage is prohibited

Although KVB Kunlun is a complete STP broker and they allow any kind of trading methods on its trading platform, there is one method which is prohibited by the broker.

Which is the “Latency Arbitrage”.

Latency Arbitrage is a trading method to earn profits by the difference of prices & times in each brokers’ accounts by abusing the systems and trading conditions.

It is not a trading to take risks by speculating, but it is a trading to earn profit by giving unauthorized advantages to the investor himself.

“Latency Arbitrage” is prohibited by many brokers, but not only KVB Kunlun.

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