Question 1

Does AvaProtect™ really offer protection when markets turn against me?

Accepted Answer

Absolutely. AvaProtect™ functions according to a very basic premise. This risk management tool protects your trading positions (on specific financial instruments that you choose) against losses. You as the trader need to select a specific period that AvaProtect™ will be active for. During that period, your trade will be protected against losses. Of course, this comes at a fee which is paid to the broker – AvaTrade South Africa. The fee is deducted at the time you protect your position, from your available cash balance. For more, read the terms and conditions of AvaProtect.

Question 2

How does AvaTrade South Africa determine the premium for AvaProtect™?

Accepted Answer

The cost of employing risk management features and functions is dependent upon the level of risk – volatility – involved in the trade. With this particular risk management resource, the premium is calculated according to the expected volatility (EV) of your underlying position, over the time frame of the contract in question. It varies from one position to the next, as you might expect. If you decide to close out a position before it expires, and the trade is in the red, you will be fully reimbursed for your loss. If you close the trade profitably, you keep the profits.

Question 3

What timeframes are available, for protection purposes, with AvaProtect™?

Accepted Answer

AvaProtect™ comes standard with 1-day protection and 2-day protection. The expiration takes place at 10 AM New York time, or GMT -5. Just recently, AvaTrade South Africa began offering much shorter trade time protections for risk management. These include 1 hour, 3 hour, 6 hour, 12-hour protection for specific FX pairs. We strongly advise that you use the AvaProtect™ function and assess the timeframes that are available for your chosen assets. This is available through AvaTradeGO’s trading page. If your position has unrealised losses at expiry time, you will automatically be credited with those losses.

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