What Are Revaluation Rates?

The term "revaluation rates" refers to rates that are commonly used to determine the performance of currencies. Traders use these market rates to assess whether a curre❀ncy 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开奖号码历史查询:closing rate for the previous 澳洲幸运5开奖号码历史查询:trading session. Commonly used to reference curr🍨ency rates in the currency market, revaluation rates are used in other markets.

Revaluation rates show the change in a currency, investment, or 澳洲幸运5开奖号码历史查询: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 today's closing rate. If the rate in🌊creases, 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开奖号码历史查询: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 of the portfolio ꦯat the given time interval.

Equity portfolio managers can show fund gains or losses by comparing the values of their fund💞 at the specified time, such as the c🅰losing 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开奖号码历史查询: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 wh✱o violate their margin requirements.

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.