Is There A Limit To The Contracts You Can Trade On Forex?
September 12th, 2009 | by Frenday |Im looking at trading FX, this is probably more a day trading question. is there a limit to the number of contracts you can trade.
Now obviously Liquidity plays a part in this as in you cant expect to open a 1 trillion dollar position in a 3 trillion market and expect good positioning,
but other then liquidity is there a limit, either recommended or compulsary.
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4 Responses to “Is There A Limit To The Contracts You Can Trade On Forex?”
By Mike on Sep 12, 2009 | Reply
Main retail brokers will easily execute 20M (200 lots) per trade and you can do it many times a day. Big time banks can probably take 200-250M of EUR-USD or USD-JPY at a time during most liquid hours.
If you have enough money to open 1 trillion dollar position, contact US treasury directly.
By Elliott on Sep 12, 2009 | Reply
A good forex broker will allow you unlimited trading to the extent that they can place the trade in the market. If all their clients decided to go with one pair in one direction at the same time, they should still be able to place your trades in the highly liquid market. If you have enough money to overwhelm your broker then you can hire a team of experts to decide how to place your trades directly in the market. There is no reccomended or compulsory limits as you may find in certain commodity futures markets. In the forex market it is your money, your risk, your life.
By Bio-SYNE on Sep 12, 2009 | Reply
Do you mean number of contracts issued on ONE trade, or number of contracts traded PER day?
On a single trade, trading anything up to 100 lots should not be a problem. This is a ridiculous amount of lots, by the way. 99.9% of people would never trade with this amount of money. Beyond 100 lots, you might run into a slight delay or some potential problem, but in theory you would never approach the actual limit.
I don’t think ANY broker would ever put a daily quota on the number of trades / lots you can trade per day. They get a slight fee each time you place a trade, so they love it when you trade!
By Adrian K on Sep 12, 2009 | Reply
Assuming you have enough cash for margin (assuming you are trading in spot of futures markets) or enough money to cover the options premium, there is really no limit to the number of contracts you can trade. Provided you broker does not have its own limits.
In reality though, you still have to find a bank (most likely a country’s reserve bank) that will take the other side of your trade.
Look up George Soros and how he sunk the Bank of England. I imagine he had a massive multi-billion dollar trade when this situation occurred.