Trading Articles

Understand the Trading Product Specification to add it in your Next Trading Portfolio

Understand the Trading Product Specification to add it in your Next Trading Portfolio

Traders are always seeking the finest ways to earn money from the comfort of their homes. They even succeed but things get wrong when they avoid caring about the trading products. These products indicate how things can be executed and trading is easy knowing them. It’s a well-known fact that pro traders recognize the secret of these products. Therefore, these traders get ahead with the trading product specifications. Here are the components of it that you need to know better before getting the most of trading.

Trading Products Specification Components

  1. Symbol of Trading Product

The symbol is the essential entity that tells you about the two country’s currency pairs. The currency pairs are known as the base and quote currencies. The first currency written is known as the base currency and the other is recognized as the quote currency. E.g. If you see AUDCAD, you know AUD means the Australian Dollars are being exchanged with CAD or Canadian dollars. Here the AUD is the base currency and the Canadian Dollars are the Quote Currency. It all depends on the exchange, buy or sell.

  1. Lot Size of Trading Products

The lot size is the number of shares you buy in one transaction. Stocks trading products have lot sizes that represent the total number of contracts in one derivative security. Lot size can affect the price quotes of the financial market and thus helps individuals get most of trading. The size of your trade will be determined by the lot size in the forex market. Thus, the investors know the number of lots they are buying and the price of each lot.

  1. Margin Percentage of Trading Product

It’s the way to analyze the healthiness of your trading account. The margin percentage depends upon the equity as well. E.g. a person who has equity of $5000 used the margin of $1000. Thus, his margin level will be 500%. Make sure your margin percentage is above 100% that will increase your chances of profit-making. With the right broker’s stocks trading products, the margin percentage will be a plus point.

  1. Swap Short 

Swap in forex is the interest you earn or pay for a trade that gets open over the night. It’s the agreement done between two parties to exchange the sequence of cash flow for some time. Swap short represents the short positions that open overnight. The right broker has this feature for you so you get the most of trading in less time. Thus, you have to constantly think upon the positions of the trading and act fast to get the trade successful.

  1. Swap Long

As we all know that swap makes it easier for two parties to exchange cash flows from two diverse financial instruments. The swap long is used to keep the long positions in the night that makes it simpler for the trader to trade all night. Thus, you get the freedom to think about your next move and you can have a great potential of earning a great income. Swap Long is thus helpful in earning interest for longer durations.

  1. Spread of Trading Products

Spread is the difference between two prices. It’s the difference between the bids and asks the price of stocks, bonds, forex, or security. Spread is the gap between a short position in which you are selling and a long position in which you are buying. Here, the difference between the amount paid to the issuer of security & the price paid by the investor for the security is known.            

  1. Trading Session

The session is one primary aspect of trading product specification that helps you get an idea of the trading time. It’s the time that matches the daytime of the trading hours of a country or city. Depending upon the hours of trade, the market of the trade, and the location, it’s calculated. Normally the traders consider the session lasts from the opening bell to the closing bell at the finance market. E.g. the trading session of the US starts at 9.30 a.m. and ends at 4 p.m. Every trade happening during this time will be calculated as a trading session here.