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Risk Levels

Margins

How is Margin Calculated

The below metrics will better help to explain the calculations which are used in the trading platform

Account BalanceThe amount of funds you have deposited in your account
Net EquityAccount Balance + Unrealised Profit - Unrealised Loss
ExposureTotal value of the position opened
Margin Requirement%(1 / Leverage of symbol) * 100
Used MarginExposure x Margin Requirement
Free MarginNet equity - Used margin
Margin Utilisation %(Net equity / Used Margin) x 100

Margin Calls and Stop Out Levels

To protect both you and the credit exposure faced by us as the executing broker, a Margin Call will be enforced when your Margin Utilisation is less than or equal to the Margin Call Level. This will be indicated on the trading platform, and provides you with the opportunity to deposit more funds or close out some of your losing positions.

Under this circumstance, you can only execute trades that reduce the trading exposure by closing or hedging existing net positions. You will not be able to open any new positions which may increase your trading exposure, until your Margin Utilisation rises above the Margin Call Level again.

Automatic Stop Outs and forced closing of positions will occur typically in the following scenarios:

  • If your Margin Utilisation drops below the Stop Out Level
  • If you remain on Margin Call constantly for 24 hours
  • If you are on Margin Call going into the weekend
  • If you are on Margin Call during periods of increased volatility, or periods when there is an
    anticipation of increased volatility
  • Going into the weekend, if your equity is below 100% of your Margin Requirement, your positions
    will be at an increased risk of being closed on a Friday evening
  • Margin Requirements are subject to change. If they increase on one or more of your
    positions then your current equity may not be enough to keep positions open
  • Finally, it is important to remember that you could be closed out at any time during margin call
Margin Call LevelStop Out Level
100%50%

If applicable, we will inform you of any changes from the default Margin Call and Stop Out Levels, and they may be raised to 100% or higher depending on market conditions or after an assessment on the risk profile of your account.

How to Calculate Your Margin Requirement %

Please use the following formula to calculate the Margin required to open a position:

Margin Requirement %= Symbol Margin / Account Leverage

For example:

Account Leverage = 1:200
EURUSD Symbol Margin = 100%
Margin Requirement % = 100 / 200 = 0.5%

Note: You can find your Account Leverage in the Client Portal, and the Symbol margin is listed on the Trading Platform.

The above is for the MT4 platform, on cTrader the leverage per symbol is listed on the Leverage panel.

Example

Trading Single Currencies on MetaTrader 4

Account Balance$25,000
Leverage of Symbol1:100
Margin Requirement %(1 / 100) * 100 = 1%
Exposure$2,400,000
Used Margin$2,400,000 x 0.01 = $24,000
Margin Utilisation($25,000 / $24,000) x 100 = 104%
Margin Call / Stop Out Level100% / 50%
  • Now the position suffers a floating loss of -$1,000, so Net Equity = $25,000 - $1,000 = $24,000
  • Margin Utilisation now equals ($24,000/$24,000) x 100 = 100%
  • *** A MARGIN CALL IS ISSUED ***
  • The position continues to move against you and the total loss is now -$13,000, so Net Equity = $25,000 - $13,000 = $12,000
  • Margin Utilisation now equals ($12,000/$24,000) x 100 = 50%
  • *** FORCED STOP OUT OCCURS ON THE LARGEST LOSING INDIVIDUAL POSITION ***

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