We do not provide mini or enlarged contract, so that investors avoid from unsatisfactory trading results due to miscalculations.
Hedging will not increase the margin
In the case that investors hedge to avoid risk, if the number of opened reverse orders does not exceed the previous, it will not ask for more margin.
No temporary increase in the margin
For significant news / events and holidays break, etc., we will not increase the margin requiirements for open positions.
Important FAQs about margin
What is the margin?
What are the factors related to the used margin?
Is used margin the lower the better?
Why keep the margin sufficient?
Will the margin be temporarily increased?
How to calculate the margin by yourself?
Why learn to calculate margin?
Almost all OTC derivatives trading such as FX / CFDs involve leverage. In the case that the investor’s account balance cannot reach the contract value of the product, the trading can be completed by borrowing funds. The initial margin required to trade a product = the contract value * number of lots / leverage.
When trading a product, high leverage and low contract value mean that clients need less margin. The higher the leverage, the lower the used margin. Also, the lower the contract value, the lower the used margin. For example, trading AUD/USD will require a lower margin than GBP/USD.
Less required margin means that with the same amount of funds, investors can open larger positions. The trading risk is perfectly positively correlated with the positions，So it means that clients are exposed to greater risks or benefits.
As long as there is leverage in the trading, even if it is only 2 : 1, the client may possibly loss all the initial investment. The high leverage means that most of the funds required to reach the contract value are borrowed. When there is floating loss in the account, insufficient margin will easily lead to forced liquidation.
We will never increase manually margin requirement for open orders under high-risk situations. However, if the client's equity reaches a higher level, it may lead to a leverage reduction which means that the margin required will increase in proportion to the reduction in leverage.
The margin is easy to calculate by yourself. The required margin for each product = the contract multiplier * the current price * lots size / leverage. If you don’t want to calculate by yourself, you can also use the margin calculator tool on our website.
Risk control is the most important factor for investors' trading success. It is easy to open an order with excessive risk exposure if you do not well understand the margin requirements of the traded products. The worst case is to receive the margin call just after opening an order because of the spread cost, which will may quickly result in stopout.