What is FX conversion?
FX conversion occurs when the instrument you trade is priced in a different currency from your account’s base currency. In these cases, values are converted using the prevailing platform exchange rate.
FX conversion:
- Takes place when you open and close a trade
- Is built into the exchange rate used, rather than charged as a separate commission
Some brokers add a separate FX conversion markup on top of the exchange rate. For knock-out options at Capital.com, no FX conversion markup currently applies.
Can FX conversion occur on knock-out trades?
FX conversion can occur on both CFDs and knock-out (KO) options when your account’s base currency differs from the currency of the underlying market.
For knock-out options at Capital.com, no FX conversion markup currently applies.
What is ‘immediate drawdown’?
Immediate drawdown means your P&L may show a small loss immediately after opening a trade. This happens because of the market spread (and any FX markup if applicable), and applies to all trading products.
Does FX conversion affect immediate drawdown on KO trades?
At Capital.com, FX conversion does not add an additional cost to knock-out trades, as no FX conversion markup currently applies.
As a result:
- Immediate drawdown is driven by the market spread only
- The knock-out level does not increase opening losses
Does this change if no FX conversion is needed?
If your account currency matches the instrument currency:
- No FX conversion takes place
- KO trades and CFDs behave the same from a currency perspective