How to Calculate Profit and Loss
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When you close out a trade, take the price exchange rate when selling the base trading profits calculation and subtract the price when buying the base currency, trading profits calculation multiply the difference by the transaction size. That will give you your profit or loss. The transaction size isEuros.
The transaction size is 10, What is your profit or loss? You can also calculate your unrealized profits and losses on open positions. Just substitute the current bid or ask rate for the action you will take when closing out the position. For example, if you boughtTrading profits calculation at 1.
Similarly, if you soldEuros at 1. Remember that you must also subtract any dealer commissions or other fees from your profits or add trading profits calculation to your losses to determine your true profits and losses.
Also, remember that the dealer makes money from the spread. If you immediately liquidate your position using the same spread, you will automatically trading profits calculation money. In this situation, what will the speculator do? Sell US dollars and buy Swiss francs at 1. Sell Swiss francs and buy US dollars at 1. That eliminates C and Trading profits calculation as possible answers. When you sell dollars to a dealer, the dealer wants to buy the currency at the bid price. In this case, when you sell dollars to the dealer, you will receive only 1.
No gain or loss D. There is not enough information in the problem to answer the question. When the dealer quotes a spread, the dealer is seeking to buy at the low price and sell at the high price. If a speculator enters this spread, she will have bought the currency at The position is offset when the spread is 1. What will be the result? In this case, our speculator sold US dollars and received Canadian dollars.
As a result, the speculator received 1. The speculator receivedCanadian dollars 1. Subsequently, the value of the US dollar depreciated against the Canadian dollar. The speculator boughtUS dollars and sold Canadian dollars for 1. The speculator still had 4, Canadian dollars, which represents his profit. However, before you can answer the question, you must convert Canadian dollars into US dollars. To solve this problem, you need to find out how many US dollars it takes to buy 4, Canadian dollars.
When the speculator reversed the long Canadian dollar position, it took him 1. How do I calculate profits and losses? This page is part of archived content and may be outdated. When you think you know the answer, advance to the next screen. The correct trading profits calculation is B. The correct answer is C.