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Please read the Important Risk Warnings for FX and Precious Metal Margin Trading Services
Empower your capital flexibly with FX and Precious Metal Margin Trading Services. Take long / short positions with leverage ratio of up to 15 times, and potentially hedge against portfolio depreciation amid market ups and downs. Enjoy lower FX rate spreads and profit from potential rollover interest and leveraged returns from forex spreads.
Mr Chow has deposited USD14,000 into his investment portfolio. He expects the gold price (XAU) against USD to decrease later.
| Investment details | |
|---|---|
| Leverage ratio | 15 times |
| Position details | Sell 50oz XAU, buy USD |
| Open XAU / USD price | USD4,200 |
| Initial collateral (in USD or other equivalent currencies) | (USD4,200 ✕ 50oz XAU) / 15 = USD14,000 |
| Initial margin level (%) | USD14,000 / (USD4,200 ✕ 50oz) = 6.67% |
Mr Chow deposited USD14,000 into the collateral account and leveraged the funds to USD210,000 with a 15 times ratio.
Mr. Chow holds a bearish view on gold price and has opened a short position of XAU / USD.
Mr. Chow decided to square the position. A new opposite position is created to offset the existing one selected, i.e. selling USD and buying XAU.
How price changes affect profit / loss
| Scenario | Profit / loss for day 2 (USD)[1][2] |
|---|---|
| The price of XAU / USD falls to 4,180 | Profit: (4,200-4,180) ✕ 50oz XAU = USD1,000 |
| The price of XAU / USD goes up to 4,220 | Loss: (4,200 - 4,220) ✕ 50oz XAU = - USD1,000 |
| The price of XAU / USD goes up to 4,270, and margin level falls to 5% | Loss: (4,200 - 4,270) ✕ 50oz XAU = - USD 3,500 Mr Chow has to deposit top-up collateral to maintain the existing position |
| The price of XAU / USD goes up to 4,354, and margin level falls to 3% | Loss: (4,200 - 4,354) ✕ 50oz XAU = - USD7,700 If Mr. Chow doesn't deposit additional collateral or make the interest payments within the prescribed time, the position may be closed out. If the collateral doesn't cover the losses and interest incurred from the close-out, you will need to make further payments to cover all losses. |
Here's the amount of rollover interest Mr. Chow can receive on day 2 (USD).
| Scenario | Rollover interest received on day 2 (USD)[3][4] |
|---|---|
| The price of XAU / USD falls to 4,180 | (50oz XAU ✕ 4,180 ✕ 2% p.a. ✕ 1 / 360) - (50oz XAU x 4,200✕ 1% p.a. ✕ 1 / 360) = USD5.78 |
| The price of XAU / USD goes up to 4,220 | (50oz XAU ✕ 4,220 ✕ 2% p.a. ✕ 1 / 360) - (50oz XAU x 4,200✕ 1% p.a. ✕ 1 / 360) = USD5.89 |
Interest for the collateral has not been included in this illustrative example.
Here's the total profit / loss Mr. Chow can receive on day 2 (USD).
| Scenario | Total profit / loss on day 2 (USD) |
|---|---|
| The price of XAU / USD falls to 4,180 | Profit: USD1,000 + USD5.78 = USD1,005,78 |
| The price of XAU / USD goes up to 4,220 | Loss: - USD1,000 + USD5.89= - USD994.11 |
FX and Precious Metal Margin Trading Services - Account Opening Guide
Generally, currency exchange refers to exchanging one currency for another according to the exchange rate. Similar to how we exchange foreign currency when we travel.
Take the currency pair EUR/ HKD as an example. If you plan to go to Europe and EUR strengthens to 10 against HKD, you can exchange EUR1,000 with HKD10,000. If EUR weakens to 8 against HKD, you can exchange EUR1,250 with HKD10,000. Therefore, if EUR depreciates against HKD, the cost of travelling will be relatively lower.
In addition, the fluctuations in exchange rates also affect investors' decisions. "Forex" or "FX" is a common abbreviation for foreign exchange, typically used to describe investors trading foreign exchange in the foreign exchange market. If you expect a currency to appreciate, you will purchase the currency. If you expect the currency to depreciate, you will sell the currency.
The FX market is comprised of multiple currency pairs in the global market. Unlike other markets, FX is quite decentralised - transactions occur globally across various markets. It’s very rare for currency pairs to maintain the same rate over an extended period of time.
In FX market, there are no restrictions when it comes to trading FX. You can buy (long) or sell (short) FX based on market conditions. Which means there’s no “Bear Market” – FX traders can earn profits (or suffer losses) regardless of which direction the market is headed.
FX trade is conducted during business hours around the globe. Therefore, investors can monitor and trade on the market 24 hours a day. With this trading flexibility, the time boundary no longer exists, meaning you can choose to start your trading hours after your office hours.
The FX market is the most liquid market in the global economy with daily settlement amounts reaching 4 trillion USD. The sheer size and volume of the FX market means each individual deal has miniscule effect on the market, hence ensuring market integrity and transparency.
The majority of the trades on the FX market use the major currencies (EUR, GBP, AUD, NZD, USD, CAD, CHF, and JPY), so investors can focus their market research on these currencies. Furthermore, almost all FX market-related news are announced to the public by governments or research institutions and is available almost instantaneously.
Let’s take an example. Mark is a professional investor. He borrows a currency with low interest (e.g. Currency A), to fund high-yield investments (e.g. Currency B) to have a carry trade. However, if there is market uncertainty and risk escalates, Mark will repay his loan with his investments to unwind his carry trade. Currency A will appreciate if it returns simultaneously (Currency B convert back to Currency A) if this pessimistic emotion throughout the market. Low-interest currencies are usually considered as Funding Currency.
When an event that can affect the global economy happens, Mark moves his capital into countries with a relatively stable economy, say Country / region C. Mark may purchase Currency C for reasons such as: Country / region C is a neutral country / region, with little or no political or economic issues. Hence Currency C may be less likely to rise or fall significantly in value. Relatively stable currencies are usually considered as safe haven currency.
Mark also likes to invest in commodity currency, meaning the particular country / region is an exporter of goods. Examples include Canada with mineral fuels, Australia with ores, New Zealand with agricultural products, etc. The respective countries’ currencies are closely related to the prices of their goods, and such is usually considered as Commodity Currency.
FX And Precious Metal Margin Trading Services is a leveraged foreign currencies and precious metals trading tool offered by the Bank, which allows you to create long and short positions according to prevailing market situation. It also empowers you with capital flexibility to capture opportunities with different strategies in line with your investment insights, making the most of the ups and downs of market trends. No physical delivery is involved. Here are the key features of FX And Precious Metal Margin Trading Services:
You can trade through various investment channels:
Please note, low trading spread refers to a relatively low trading spread compared to, for example, telegraphic transfer rates and currency note exchange rates. All of the above features and services are subject to Terms and Conditions.
You can enquire real-time FX and precious metal quotes, buy/sell, place conditional orders, cancel & enquire conditional orders via Personal e-Banking or Hang Seng Mobile App. Also, you can check your outstanding positions, squared positions, transaction history and account information.
We provide real-time streaming FX and precious metal quote, global news, today’s focus and market commentary.
If you are a holder of Hang Seng Integrated Account, you may apply for a FX and Precious Metal Margin Trading Services Account via Personal e-Banking, Hang Seng Mobile App or by visiting any of our branches. You can refer to our Terms and Conditions, and Account Opening Guide under "Knowledge and insights" section on this page for more information.
If you are new or non-integrated account customer, you may open an integrated account and activate your investment account via Hang Seng Mobile App[8]. View more details at: https://www.hangseng.com/en-hk/personal/banking/account-opening/mobile/
Collateral Account is an account where you place collateral for FX and precious metal trading.
The following can be used as collateral:
You need to have sufficient collateral to create or maintain an open position by reference to the Top Up Collateral Level and/or the Close-out Collateral Level. You are reminded to monitor your collateral balance closely on an on-going basis.
Yes. You can square an outstanding position partially.
Whenever you intend to conduct a real-time buy / sell-trade or place a conditional order with us, you may choose to either
If you choose to “Square”, a new opposite position will be created which will be immediately used to set-off an existing position chosen by you.
You may enter into a squared position as long as there is an existing opposite position.
When your collateral level decreases to 3%, a Close-out event will be triggered. The outstanding currency or precious metal position with the largest floating loss will be closed out first.
You can reactive your account by logging on Personal e-Banking, then choose “Account Services” > “Other Related Services” > “Reactive Inactive/ Dormant Account”.
Generally, trading hours are Hong Kong Time from Mon 6:00 a.m. to Sat 3:30 a.m. Actual service hours may vary due to the close of relevant FX or precious metal market on occasions such as holidays.
You may set up transfer order for HKD / foreign currency via Personal e-Banking, Hang Seng Mobile App during below service hours.
Deposit: Mon 5:40 a.m. to Sat 6:05 p.m.
Withdrawal: Mon 6:00 a.m. to Sat 3:30 p.m.
No. Your conditional orders will only be monitored and executed during trading hours.
FX and precious metal are traded in lots, with minimum threshold of 1 lot. There is a difference in the minimum contract lot size across FX and precious metals pairs. There is no transaction fee for non-precious-metal trading. For precious metal trading, the transaction fee is USD1/ lot per transaction (applicable to all buy / sell transactions and execution of conditional orders but not applicable to close-out transactions).
The below table summarises the minimum contract lot size of each currency / precious metal under FX and precious metal in Personal e-Banking Services.
The trades and accrued interests will be settled in USD.
Spot rate is a price quoted for immediate settlement, while order rate is a rate within some pre-determined basis points of the spot rate under your choice.
There is no upper limit in number of currency / precious metal pairs to be placed in your watchlist.
After entering the "Confirmation" page, the transaction price will be updated every 5 seconds.
No. Your relevant open-position conditional order will be cancelled automatically without notice when the market price reaches the order rate.
You have a choice of 4 types of worldwide conditional orders under the FX and Precious Metal Margin Trading Services:
| Normal Order | To buy / sell at a pre-set price of exchange rate or precious metal price. |
| Either-Or Order | 2 normal orders are placed and if any of them is executed, the other will automatically be cancelled. |
| If-Then Order | 2 normal orders are placed but only when the first order (i.e. the “IF” leg) is executed, the second order (i.e. the “THEN” leg) will be activated. |
| 2-in-1 Order | A combination of an If-Then order and an Either-Or order, whereby the Either-Or order is the “Then” leg of the If-Then order. Only when the first order (i.e. the “IF” leg) is executed, the second order (i.e. the Either-Or order) will be activated, where upon if any normal order in the Either-Or order is executed, the other one will automatically be cancelled. |
Yes. There will be a separate monthly statement for the account, unless you have no trading activity and no balance as of month-end.
In addition to viewing all transactions during the day on the FX And Precious Metal Margin Trading Services daily e-Advice, you can also log on to Personal e-Banking > "Investments" > "FX And Precious Metal Margin Trading Services" > "Transaction History" tab, or go to the left menu of Hang Seng Mobile App > "Investments" > "FX And Precious Metal Margin Trading Services" > "Transaction History" to view transaction made up to 60 days.
What's more, you will receive monthly statement with details such as collateral level, collateral account balances, outstanding positions and transaction records.
The prevailing rate / price between open and square / close a position will affect the profit / loss. In addition, daily rollover interest will be accrued based on the currency/ precious metal you buy, whereas a daily rollover interest will be charged based on the currency / precious metal you sell in the outstanding position, according to the prevailing practice in the market. The interest accrued will be netted off against the interest charged, and affect your profit / loss.
Open an integrated account and activate your investment account via Hang Seng Mobile App with ease[8]
FX and Precious Metal Margin Trading Services is just a few steps away[9]
Investment involves risks. The below risk disclosure cannot disclose all the risks involved. You should read and understand all the relevant documents and risk disclosure (in particular, the Risk Disclosure Statement contained in the relevant application form and terms and conditions) before making any investment decision.
Investment involves risks. The below risk disclosure cannot disclose all the risks involved. You should read and understand all the relevant documents and risk disclosure (in particular, the Risk Disclosure Statement contained in the relevant application form and terms and conditions) before making any investment decision.