Dynamic margin
Dynamic margin calculates and updates the margin requirement in real time based on the size of your open position and whether you are hedging or not.
Dynamic margin is a method of calculating margin requirement rates for open positions based on the size of the exposure, and whether any of the position is hedged or not.
This therefore means that different margin amounts will be applied to open positions depending on the size of the position held (market exposure) and whether the position is hedged or not. In summary the bigger a position/exposure the greater the margin requirement.
As a general rule, any position greater than 10 lots will be subject to the new dynamic margin rules. This means that the first 10 lots of a position will be subject to our lowest margin rates. Any position size (market exposure) greater than the first 10 lots will then see higher margin requirements for the portion that exceeds the first 10 lots. Any pending orders that are activated will also be subject to the dynamic margin requirements at the time of order execution.
Dynamic margin rates are applied on a per market (instrument) basis and is not a total account limit. This therefore means that you can have open positions of 10 lots across each and every market/ instrument we quote and still only be subject to our lowest margin rates. However, any portion of a position that exceeds the first 10 lots will have a higher margin requirement applied to that portion.
Any hedged positions will require 50% of the margin requirement of equivalent unhedged positions.
In situations where a position is partially/fully hedge, the hedge side of the trade can only be closed (fully/Partially) if the free equity in the account post closure is sufficient to cover the revised margin requirements. Alternatively, the client will be required to top up the account to have sufficient equity or client will have to close the hedged trades (both sides) with losses realised (As in Example 5 below).
Examples
Example 1: A client is long 1 lot in a major cross that currently requires $1,000 in margin (1%).
Margin required under fixed margin set up: $1,000
Margin required under Dynamic Margin set up: $1,000
Example 2: A client is long 1 hedged lot in a major cross that currently requires $1,000 in margin.
Margin required under fixed margin set up: $1,000
Margin required under Dynamic Margin set up: $500
Example 3: A client is short 20 lot in a major cross that currently requires $20,000 in margin ($1,000 per lot, 1%).
Margin required under fixed margin set up: $20,000
Margin required under Dynamic Margin set up: $30,000 (1% for first 10 lots, 2% for next 10 lots)
Example 4: A client is short 20 lots in a major cross and also long 10 lots in the same market. So the client is short 10 lots and hedged on 10 lots. The market has $1,000 margin per lot (1%).
Margin required under fixed margin set up: $20,000
Margin required under Dynamic Margin set up: $15,000 ($10,000 for short position + $5,000 for hedged position (50%))
Example 5: A client is long 20 lots in a major cross, then sells 10 a little while later to part hedge his position. A little after this the client decides to remove the hedge leg of the trade by buying back 10 lots, thereby making him long 20 lots again. The market requires $1,000 margin per lot (1%).
Initial Dynamic Margin requirement: $30,000 (1% for first 10 lots, 2% for next 10 lots)
Dynamic margin requirement after hedge placed: $15,000 ($10,000 for short position + $5,000 for hedged position (50%))
Dynamic margin requirement after hedge removed: $30,000 (1% for first 10 lots, 2% for next 10 lots)
So the margin requirement has gone from $30,000 to $15,000 back to $30,000. However, if the client no longer has the $30,000 required to maintain an unhedged position then he will not be able to remove the hedge position unless he tops up his available balance to cover the increase in margin requirement.
So he can either close the whole hedged position in one go. Or otherwise top up the funds in his account so that he has a total of $30,000 to cover the whole position unhedged.
For example, if the client has an equity valuation of $25,000 a short while after placing the hedge and then decides he wants to remove the hedge, he will then need to add and extra $5,000 to bring his account up to the required $30,000 in order to unhedge the position.
Otherwise, the client will need to close the entire hedged position in one go, or close parts of his unhedged position, to free up money to allow him to maintain a fully unhedged position.
Dynamic Margin Table
Note: Hedged positions will be 50% of the margin equired for unhedged positions
| Market | MARGIN REQUIREMENT (0-50 LOTS) | MARGIN REQUIREMENT (50.01-100 LOTS) | MARGIN REQUIREMENT (100.01-150 LOTS) | MARGIN REQUIREMENT (150.01-200 LOTS) | MARGIN REQUIREMENT (200.01-250 LOTS) | MARGIN REQUIREMENT (250+ LOTS) |
|---|---|---|---|---|---|---|
| Common Pairs | ||||||
| AUDCAD | 1% | 2% | 3% | 5% | 10% | 10% |
| AUDJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| AUDNZD | 1% | 2% | 3% | 5% | 10% | 10% |
| AUDUSD | 1% | 2% | 3% | 5% | 10% | 10% |
| CADCHF | 1% | 2% | 3% | 5% | 10% | 10% |
| CADJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| CHFJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| EURCAD | 1% | 2% | 3% | 5% | 10% | 10% |
| EURCHF | 6% | 8% | 15% | 18% | 20% | 20% |
| EURGBP | 1% | 2% | 3% | 5% | 10% | 10% |
| EURJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| EURUSD | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPCAD | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPUSD | 1% | 2% | 3% | 5% | 10% | 10% |
| NZDCAD | 1% | 2% | 3% | 5% | 10% | 10% |
| NZDUSD | 1% | 2% | 3% | 5% | 10% | 10% |
| USDCAD | 1% | 2% | 3% | 5% | 10% | 10% |
| USDCHF | 1% | 2% | 3% | 5% | 10% | 10% |
| USDDKK | 10% | 15% | 20% | 30% | 40% | 40% |
| USDJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| USDNOK | 1% | 2% | 3% | 5% | 10% | 10% |
| USDPLN | 6% | 8% | 15% | 18% | 20% | 20% |
| USDSEK | 1% | 2% | 3% | 4% | 10% | 10% |
| USDSGD | 6% | 8% | 15% | 18% | 20% | 20% |
| USDZAR | 6% | 8% | 15% | 18% | 20% | 20% |
| Minors Pairs | ||||||
| AUDCHF | 1% | 2% | 3% | 5% | 10% | 10% |
| CHFPLN | 10% | 15% | 20% | 30% | 40% | 40% |
| CHFSGD | 6% | 8% | 15% | 18% | 20% | 20% |
| EURAUD | 1% | 2% | 3% | 5% | 10% | 10% |
| EURDKK | 6% | 8% | 15% | 18% | 20% | 20% |
| EURNOK | 1% | 2% | 3% | 5% | 10% | 10% |
| EURNZD | 1% | 2% | 3% | 5% | 10% | 10% |
| EURSEK | 1% | 2% | 3% | 5% | 10% | 10% |
| EURSGD | 6% | 8% | 15% | 18% | 20% | 20% |
| GBPAUD | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPCHF | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPNZD | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPPLN | 1% | 2% | 3% | 5% | 10% | 10% |
| NZDCHF | 1% | 2% | 3% | 5% | 10% | 10% |
| NZDJPY | 1% | 2% | 3% | 5% | 10% | 10% |
| USDCNH | 6% | 8% | 15% | 18% | 20% | 20% |
| USDHKD | 10% | 15% | 20% | 20% | 40% | 40% |
| USDMXN | 1% | 2% | 3% | 5% | 10% | 10% |
| Exotic Pairs | ||||||
| EURHUF | 6% | 8% | 15% | 18% | 20% | 20% |
| EURMXN | 1% | 2% | 3% | 5% | 10% | 10% |
| EURPLN | 6% | 8% | 15% | 18% | 20% | 20% |
| EURZAR | 10% | 15% | 20% | 30% | 40% | 40% |
| GBPSEK | 1% | 2% | 3% | 5% | 10% | 10% |
| GBPSGD | 6% | 8% | 15% | 18% | 20% | 20% |
| GBPZAR | 10% | 15% | 20% | 30% | 40% | 40% |
| USDCZK | 10% | 15% | 20% | 30% | 40% | 40% |
| USDHUF | 6% | 8% | 15% | 18% | 20% | 20% |
| Spot Commodities | ||||||
| UK Oil | 2% | 3% | 5% | 5% | 10% | 10% |
| US Oil | 2% | 3% | 5% | 5% | 10% | 10% |
| Gold | 1% | 2% | 3% | 5% | 10% | 20% |
| Silver | 1% | 2% | 3% | 5% | 10% | 20% |
| ETFs | ||||||
| VCSH.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| ACWI.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| BND.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| VXUS.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| ICLN.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| TQQQ.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| VCIT.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| IEI.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| QQQ.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| SHV.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| SHY.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| SUSL.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| TLT.ETF | 25% | 25% | 25% | 25% | 25% | 25% |
| Cash Equity | ||||||
| Symbol.US* | 100% | 100% | 100% | 100% | 100% | 100% |
| Cryptos | ||||||
| Cryptos | 25% | 25% | 25% | 25% | 25% | 25% |
| Cash Indices | ||||||
| Germany 30 | 1% | 1% | 2% | 2% | 5% | 5% |
| Spain 35 | 1% | 1% | 2% | 2% | 5% | 5% |
| France 40 | 1% | 1% | 2% | 2% | 5% | 5% |
| Japan 225 | 1% | 1% | 2% | 2% | 5% | 5% |
| EU Stocks 50 | 1% | 1% | 2% | 2% | 5% | 5% |
| UK 100 | 1% | 1% | 2% | 2% | 5% | 5% |
| US 30 | 1% | 1% | 2% | 2% | 5% | 5% |
| US 500 | 1% | 1% | 2% | 2% | 5% | 5% |
| USTEC 100 | 1% | 1% | 2% | 2% | 5% | 5% |
| Equity CFDs | ||||||
| US | From 10% | From 10% | From 10% | From 10% | From 10% | From 10% |
| Futures CFDs | ||||||
| Silver xx | 1% | 2% | 3% | 5% | 10% | 20% |
| Gold xx | 1% | 2% | 3% | 5% | 10% | 20% |
| US Oil xx | 1% | 2% | 3% | 5% | 10% | 20% |
| US30 xx | 1% | 2% | 3% | 5% | 10% | 20% |
| US500 xx | 1% | 2% | 3% | 5% | 10% | 20% |
| USTEC xx | 1% | 2% | 3% | 5% | 10% | 20% |
| DE30 xx | 1% | 2% | 3% | 5% | 10% | 20% |
