Derivative Instruments In Forex TradingTrade CFDs (Contract For Different) in forex trading using derivative instruments, namely the reimbursement agreement with the decrease in the value of the principal reference product, or often referred to as derivative products. Therefore, the CFD in the transaction, an investor has the full risks and benefits of financial instruments in question without having to pay all of nominal value of the instrument. In other words, an investor needs to pay only margin or collateral in a certain amount of value to trade in a number of financial instruments.
In currency trading, or often known as forex trading have used instruments of CFDs (Contract For Different), which provide facilities in the form of leverage. In Forex Trading, leverage can also be understood as power bob up, the ratio used to determine the margin or collateral in the transaction. The ratio is multiplied by the value of the contract. For instance, by setting a leverage of 1:400, for transact forex trading 1 lot, for example, 1 lot = 10,000, then the margin or collateral used is (1:400) x 10,000 = 25 units traded currency (example 25 USD , if trading in USD).