July 23, 2010
Is there a limit to the contracts you can trade on Forex?
By Planet Wealth
Im looking at trading FX, this is probably more a day trading question. is there a limit to the number of contracts you can trade.
Now obviously Liquidity plays a part in this as in you cant expect to open a 1 trillion dollar position in a 3 trillion market and expect excellent positioning,
but other then liquidity is there a limit, either recommended or compulsary.
Topics: Uncategorized | 4 Comments »
4 Responses to “Is there a limit to the contracts you can trade on Forex?”
Comments
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July 23rd, 2010 at 10:19 am
Assuming you have enough cash for margin (assuming you are trading in spot of futures markets) or enough money to cover the options premium, there is really no limit to the number of contracts you can trade. Provided you broker does not have its own limits.
In reality though, you still have to find a bank (most likely a country’s reserve bank) that will take the other side of your trade.
Look up George Soros and how he sunk the Bank of England. I imagine he had a massive multi-billion dollar trade when this situation occurred.
July 23rd, 2010 at 10:19 am
Do you mean number of contracts issued on ONE trade, or number of contracts traded PER day?
On a single trade, trading anything up to 100 lots should not be a problem. This is a ridiculous amount of lots, by the way. 99.9% of people would never trade with this amount of money. Beyond 100 lots, you might run into a slight delay or some potential problem, but in theory you would never approach the actual limit.
I don’t reckon ANY broker would ever place a daily quota on the number of trades / lots you can trade per day. They get a slight fee each time you place a trade, so they like it when you trade!
July 23rd, 2010 at 10:19 am
Main retail brokers will easily do 20M (200 lots) per trade and you can do it many times a day. Huge time banks can probably take 200-250M of EUR-USD or USD-JPY at a time during most liquid hours.
If you have enough money to open 1 trillion dollar position, contact US treasury directly.
July 23rd, 2010 at 10:19 am
A excellent forex broker will allow you unlimited trading to the extent that they can place the trade in the market. If all their clients chose to go with one pair in one direction at the same time, they should still be able to place your trades in the highly liquid market. If you have enough money to overwhelm your broker then you can hire a team of experts to choose how to place your trades directly in the market. There is no reccomended or compulsory limits as you may find in certain commodity futures markets. In the forex market it is your money, your risk, your life.