Simulator Spot Trading
Spots are very easy to trade (if your contest allows it). Simply choose the action like you would with a stock, select the quantity and the spot you wish to trade from the dropdown from the Spots trading page.
There are a few things to note with spot contracts:
There are 3 major types of spots, all of which will be in the same drop-down menu:
- Currencies, like Euros or Australian Dollars (purchased at the current exchange rate, like Forex)
- “Durable” commodities (like gold, silver, and oil)
- “Soft” commodities (like wheat, corn, and soybeans)
Not everything you can trade as a future will be available as a spot (for example, we have Cocoa futures, but not Cocoa spots). In real life, taking delivery of soft spots can be risky, since they can spoil, but you can’t take delivery here so that won’t be a problem.
We only support market orders for Spot contracts. You can either buy or short spots, depending on your class rules.
Spots quotes have some important differences from Stock quotes.
- We do not show the day’s range or day’s change on the quotes (these appear as 0.00).
- All spots have infinite volume, so you can buy or sell as much as you need.
Like spots quotes, the prices shown on the trading page and your open positions will have a 15 minute delay, but we execute all orders at real-time bid/ask prices.
Also like stocks, if you buy or cover a spot, you will get the “Ask” price, but if you sell or short, you will get the Bid price.
When trading currency spot contracts, you are buying and selling a currency pair. This means you are buying the first currency listed in the pair, based on its FX rate with the second currency in the pair.
In the example above (AUD/USD), I would be buying 1 Australian dollar, denominted in US dollars. The exchange rate is about 0.7721, executing this trade will buy 1 Australian dollar at the cost of 0.7722 US dollars (the “Ask” price).
Three Currency Trades
The example above is straightforward if my portfolio is already denominated in US dollars, since I know it will cost me 0.7722 dollars to place the trade. However, you can also trade currencies outside your portfolio currency. In this example, I will keep my portfolio in US dollars, but now I want to buy Euros, denominated in Australian dollars:
In this example, buying 1 Euro will cost me 1.3934 AUD (the “Ask” price). However, since my portfolio is in US dollars, I need to convert that 1.3934 AUD to USD.
1.3934 AUD = 1.0758 USD
That now tells me how much cash this trade will cost me in my USD portfolio.
Once I am holding this spot contract, my Open Positions will continue to fluctuate based on both the exchange rate between EUR/AUD and AUD/USD, since the system will apply both FX rates when calculating the market value in USD for my total portfolio value.