Forex Trading Margins
FXCM Asia offers leveraged currency trading and every trader can select the degree of leverage they wish to employ. Unless the trader specifies otherwise, FXCM Asia sets the leverage level at default margin level which is 5% per lot (20:1 leveraging, the maximum allowed by the SFC regulations).
Requirements for leverage vary with account size, and may be changed from time to time at the sole discretion of FXCM Asia, based on volume traded and market conditions.
- Initial Margin Level – 5%
In order to open a new position, available account equity must exceed initial margin level requirement. The initial margin level requirement is 5% of open positions value. - Maintenance Margin Level – 3%
When the equity of an account falls below the maintenance margin level requirements, FXCM Asia has the right at its discretion to close open positions until account equity exceeds the maintenance margin level requirement. The maintenance margin level requirement is 3% of open positions value. - Liquidation Margin Level – 1%
When the equity of an account falls below the liquidation margin level requirement, FXCM Asia will automatically close all open positions in the account. The liquidation margin level is 1% of open positions value.
| Initial Margin Level | 5% of Open position value |
| Maintenance Margin Level | 3% of Open position value |
| Liquidation Margin Level | 1% of Open position value |
Calculations for Margin Requirements:
Initial Margin: MMR x 5 x lots traded
Maintenance Margin: MMR x 3 x lots traded
Liquidation Margin: MMR x lots traded
Minimum Margin Requirement (MMR) calculates the margin requirement based on 1% of gross principal value within 50-100 points of the current market value. MMR value is posted in the “simple dealing rates” window on the FXCM Asia Trading Station and is recalculated from time to time in order to reflect current market conditions. Under normal market conditions, MMR will be recalculated at approximately 5pm Eastern Standard Time each day.
Examples
Initial Margin Requirement:
Trader wants to buy 3 lots (30,000) EUR/USD while the current price is at 1.42971/1.42996 (MMR shows US$130). The Initial margin requirement is calculated as follows:
US$130 x 5 x 3
= US$1,950
The initial margin requirement per lot is US$650.
Maintenance Margin Requirement:
Trader wants to buy 3 lots (30,000) EUR/USD while the current price is at 1.42971/1.42996 (MMR shows US$130). The maintenance margin requirement is calculated as follows:
US$130 x 3 x 3
= US$1,170
The maintenance margin requirement per lot is US$390.
Liquidation Margin Requirement:
Trader wants to buy 3 lots (30,000) EUR/USD while the current price is at 1.42971/1.42996 (MMR shows US$130). The liquidation margin requirement is calculated as follows:
US$130 x 3
= US$390
The liquidation margin requirement per lot is US$130.
Note: The above examples are for reference only