Foreign Exchange (FX)
Tapping on the strengths of UOB, a leading bank in Asia, UOB Bullion and Futures has the ability to provide competitive voice and electronic broking service in spot foregin exchange (FX) to our domestic and international clients.
  • SPOT FX
  • Non-deliverable forwards (NDF), and
  • Precious metals.

     
Foreign Exchange Market
     
The FX market, unlike other financial markets, has no physical location or central exchange. It is a worldwide decentralised over-the-counter market which is open 24 hours a day, five days a week for market participants such as banks, other financial institutions, corporations, and institutional and individual investors to trade. It is the largest, most liquid market in the world with an average daily turnover of approximately $5.3 trillion, according to the Bank for International Settlements (BIS) report dated April 2013.
     
Characteristics of FX Market    
     
Trading Hours

Other financial markets' trading hours are dictated by the market hours of the exchanges and time zones which they are located, whereas the FX market is open 24 hours a day, five days a week, making it a liquid market throughout the day. Therefore, traders will always have a choice of when to enter or exit the market. Also, individual investors in Asia who usually may not be able to trade during their working hours will have a chance to trade after work, which are the hours when the US and UK markets are open and the greatest trading volume and liquidity are seen.


Lower Transaction Cost

Trades on the FX market are free from a variety of fees, such as administrative fees, clearing fees, exchange fees and government fees. Only a commission is charged on per trade basis.


Transparent Market

The FX market is probably closest to the ideal fair market, notwithstanding occasional market interventions by some central banks. In the FX market, the vast volume and liquidity virtually make it impossible for even the biggest players to interfere with the general trend in the market.
  Liquidity

The FX market is the world's most liquid market, giving investors the confidence to know that market activities remain constant and there are much fewer price gaps and erratic spikes as seen in lower-volume markets.


No Restrictions on Short Selling

While stock markets have restrictions on short selling (placing a sell order when you think the market is bearish without the underlying) and investors can mostly only profit in a rising market, the FX market does not have such restrictions, providing investors the opportunities to profit from both rising and falling markets.



However, customers should be aware that they may also sustain substantial losses in trading FX in both rising and falling markets and therefore should consider carefully the risks before participating in the FX market.
     
     
     
     
FX Leveraged Margin Trading
     
Characteristics of Leveraged Trading    
     
Although it is attractive to trade on the FX market, the initial investment, as with any other financial products, can be relatively high. Leveraged margin trading in the FX market enables investors to increase the size of their positions by putting up a small percentage of the full value of their positions. With leverage, investors have the freedom to control a large position while utilising less capital to trade.



[Example]
A buy order of 100,000 USD/JPY at an exchange rate of 90.50.

Without Leverage
USD 100,000 is required.

UOB FX Margin Trading Account
Initial margin of USD 5,000 is all you need.
(100,000 × 5% =5,000)
(subject to a minimum deposit of SGD 30,000)
 
Margin A minimum of SGD30,000 to open the account. Initial margin requirement is 5.0% and the maintenance margin is 3.0%. Margining is on a net basis and will be in minor currency, example USD/JPY will be margining in JPY. Should your available margin fall below the prescribed maintenance margin, a margin call will be made on your account to top up to the initial margin level within 2 working days or your position will be liquidated.
Tradable Currency Pair We are currently quoting FX prices for JPY, EUR, CHF, GBP, CAD, AUD, NZD as well as cross currency pairs such as EUR/JPY, EUR/CHF, EUR/GBP, EUR/AUD, EUR/NZD, AUD/JPY, NZD/JPY, CAD/JPY, CHF/JPY, NOK/JPY, SEK/JPY, ZAR/JPY and GBP/JPY. We will be glad to provide FX quotes for other currency pairs upon your request, subjected to our management's review.
Contract Size The minimum contract size per transaction is 100,000 of the base currencies. For example, the minimum contract size per transaction for USD/JPY will be USD100,000 while that of EUR/JPY will be EUR100,000. Each subsequent increment is in a minimum of 100,000.
Quotation Spreads We will usually quote 1~3 pips spread for major currencies and 3~6 pips for major crosses. These apply in normal market conditions.
Commision We will charge a fixed commission to the transacted price for transactions done online. There will be an additional 2 pip charge for orders done over the phone. This commission charge will also be applied for working limit order and stop loss order. For stop loss order, the executed price would depend on the prevailing market conditions.
Types of Orders We will take DO (good till New York close), GTW (good till New York close on Friday) or GTC (good till cancel).
Trading Hours Our trading desk operates on a 24-hour basis from 6:00 am Singapore time on Monday to New York closing on Friday.
Swap Points Your open positions in your trading account will be carried over at historical prices. However, we will credit / debit swap points to / from your account to compensate for interest rate differentials between currencies bought or sold. The swap points price applied will depend on the prevailing market conditions.
Type of Orders Market order, limit order, stop loss order, if done order, if done limit order, OCO order.
Interest Interest will be charged for deficit currencies due to margining or unrealised losses. Interest will be calculated daily and reflected on your statement at the beginning of the next month.
Contra Positions Intra-day low buy and low sell position will be contra first followed by first out low buy and low sell.
Statement Statements would be faxed / emailed (by 12:00 pm). The hard copy of the daily activity statement can also be posted to your registered address the next working day upon your request. All positions will be marked-to-market using settlement price (New York close) to reflect the realized profit and loss. The swap amount paid / received by you will be reflected in the statements as well. Please note that you would have to take due care in checking the statement.