FX spot and FX forward unrealised profit/loss calculation changes effective 1 August 2018
The Account Value shows the current value of the account, combining:
- The cash balance
- Plus or minus the value of any unrealised profit/loss of open positions
- Plus the market value of any options, stocks, bonds, ETFs and other funds
The value of any unrealised profit/loss of FX spot and FX forward positions is changing from being calculated on the mid-price, to being calculated on the opposite-sided price.
- A net long (buy) position will be valued according to the offer price, not the mid-price
- A net short (sell) position will be valued according to the bid price, not the mid-price
Opposite-sided price means that positions are valued according to the opposite price to the price that the position will be closed at, e.g. a long (buy) position will be valued according to the offer price but closed at the bid price. This arrangement is designed to protect clients from the risk that their positions are closed-out as a result of spreads widening without the market actually moving. This could happen around the release of economic statistics or at times of reduced liquidity such as during a value date roll or during the close and opening of the market.
Please note that this change applies to the calculation of any unrealised profit/loss related to the Account Value only. Single position profit/loss is not changing, since this already uses the price that the position will be closed at, e.g. a long (buy) position profit/loss is calculated according to the bid price.