We send a detailed Trading Statement to clients once a trade has completed. This Trading Statement contains all information related to the trade. Herewith a fictitious example of a statement and what each value on the statement means as well as how the values are calculated:
| Initial Cost: | 300 500.00 ZAR |
| Forex Transaction Fee: | - 500.00 ZAR |
| Forex Conversion Fee: | -1 500.00 ZAR |
The first three values on the statement (shown above) are provided to the client as a courtesy and occur external to the actual arbitrage trade.
- The Initial Cost is the amount of ZAR the client spends to complete the entire transaction.
- The Forex Transaction Fee is the amount deducted by the Bank in order to facilitate the sending of the funds abroad for Koinexpert to execute trades. Some banks charge different fees. For example, currently Mercantile charges a fixed fee of R500 and Investec charges a fixed fee of R450.
- The Forex Conversion Fee is a percentage of the remaining amount after the Forex Transaction Fee is deducted. This is a fee charged by the Forex Intermediary to facilitate the sending of your funds abroad. Most intermediaries currently charge 0.5%.
In the above example, the 0.5% Forex Conversion Fee would be calculated as follows:
300 500.00 ZAR - 500.00 ZAR
= 300 000.00 ZAR
0.5% of 300 000.00 ZAR
= 1 500 ZAR
The remaining amount is called the Trading Capital and is calculated as follows:
300 500.00 ZAR - 500.00 ZAR - 1 500.00 ZAR
= 298 500.00 ZAR
The Trading Capital amount (in this example, the 298 500.00 ZAR) is the ZAR equivalent of the US Dollars that is sent to Koinexpert. We receive this amount after all external fees are deducted and it is the amount we use to execute Arbitrage Trades.
Depending on the market conditions, a profit will be generated which usually ranges between 1% and 7% of the Trading Capital Amount. For the calculation below, we will assume a net profit of 5%, which would result in:
5% of 298 500.00 ZAR
= 14 925.00 ZAR
Koinexpert charges 20% of the profit generated as a service fee:
20% of 14 925.00 ZAR
= 2 985.00 ZAR
The final fee that is then deducted is the "withdrawal fee", which is the cost of sending the final amount to your bank account. For Standard Bank accounts, this fee is fixed at R 30.00 ZAR whereas for all other bank accounts this fee is fixed at R60.00 ZAR.
The calculations would then end as follows:
| Trading Capital: | 298 500.00 ZAR |
| Trading Profit/Loss: | 14 925.00 ZAR |
| Service Fee: | -2 985.00 ZAR |
| Withdrawal Fee: | -60.00 ZAR |
Adding these values would result in the final "Proceeds" amount, which is the amount sent to your bank account:
298 500 + 14 925 - 2985 - 60
= 310 380.00 ZAR