Orders are opened with a negative balance due to the spread cost included in the order.

The spread is the main source of profit for many brokers, including ArtCap. Since we offer a floating spread, in market conditions the spread increases in accordance with the trading volume, but ArtCap aims to provide a stable spread regardless of the volume of trading orders. The average value offered for each trading instrument may vary from order to order to soften the volatility of the market.

How is the spread calculated

Let's consider an example, you place a buy order on a standard account with 1:2000 leverage for 5 lots of EURUSD at an open price of 1.04620/1.04630 and close the position at a price of 1.04680/1.04690.

In this example, the spread is calculated as follows:

Spread = (ask price - bid price) / pip size (1.04630 - 1.04620) / 0.0001 = 1 pip

Pip value = lot x contract size x pip size (5 x 100,000 x 0.0001) = $50

Spread cost = pip spread x pip value = 1 x 50 = $50
So in this example, the spread cost is $50, so this order will open with a negative balance of -$50.

The price movement will determine whether the trade goes in the profitable or unprofitable direction; in our example, the buy order opened at 1.04630 was closed at 1.04680, resulting in a profit.

Profit from buy orders = [Closing price (buy) - Opening price (sell)] / Pip size × Pip value = (1.04680 - 1.04630) / 0.0001 × 50 = $250
The final profit made by the trader will be $250 after deducting the cost of the spread ($50).

                             We wish you successful trading with ArtСap !