What Are Revaluation Rates?

The term "revaluation rates" refers to rates that are commonly used to determine the performance of currencies. Tra♓ders use these market rates to assess whether a currency realizes a profit or loss at any point in time.

Understanding Revaluation Rates

The revaluation rate is primarily considered the 澳洲幸运5官方开奖结果体彩网:closing rate for the previous 澳洲幸运5官方开奖结果体彩网:trading session. Commonly♔ used to reference currency rates in the currency market, revaluat🍌ion rates are used in other markets.

Revaluation rates show the change in a currency, investment, or 澳洲幸运5官方开奖结果体彩网:portfolio's value at any given point in time. To assess a trader's profit or loss, they use the closing rate from the day before, today's revaluation rate, as a baseline to compare ꦕtoda⛄y's closing rate. If the rate increases, the trader makes a profit. If it drops, there is a loss.

Many equity and bond portfolio managers use the daily 澳洲幸运5官方开奖结果体彩网:WM/Reuters rates to revalue their portfolios. These rates are calculated using an average rate over a one-minute trading period, which is 30 seconds before and 30 seconds after 4:00 pm London time. This🎐 gives investors a precise value 𝓀of the portfolio at the given time interval.

Equity portfolio managers can show fund gains or losses by compaꦆring the values of their fund at the specified time, such as the closing value of the fund yesterday compared to its closing value today.

The revaluation rate is important for retail investors. If a position is revalued at a significant loss, the investor may be 澳洲幸运5官方开奖结果体彩网:margin-called and they may be required to further fund their account if they wish to continue holding the position. Brokers regularly revalue positions at the close of the day and issue margin calls to those who violate their margin re𒅌quir🔜ements.

Example of Revaluation Rates

To show how revaluation rates work in the foreign exchange market, assume a trader has a position in EUR/USD worth $100,000 and the last closing price for this currency pair was 1.1450. The close of the following day is 1.1425. The prior day's close (1.1450) becomes the revaluation rate used to assess the position's profit or loss and the rate reveals that if the trader sells that day, they make $250 (1.1450 - 1.1425 x $100,000), or 25 pips.