New Margin Requirements Take Effect November 22nd
*Please carefully read the below sections in orderSECTION ONE: What are the new Margin Requirements?
What are the new margin requirements?
Please see the FXCM LTD Micro Margin Requirements Table below.
When does the new rule TAKE effect?
The new margin requirements take effect at trading open on Sunday, November 22nd.
Why is FXCM changing the way margin requirements are set?
At FXCM we strongly believe that utilizing high levels of leverage can be very dangerous and not in the best interest of our traders. We have often seen a few losing trades offset many winning trades.
FXCM's experience in Hong Kong, where significantly lower leverage levels (higher margins) are mandated by law, suggests that trading with lower leverage may assist clients in trading more successfully over an extended time period. The new margin requirements we have put in place are intended to reduce risk by restricting traders from using excessive leverage.
Will my account be affected by this change?
All Micro accounts held with Forex Capital Markets Ltd (FXCM UK) will be affected by the new margin requirements.
- All positions and orders established after November 22nd will be subject to the new margin requirements.
- Additionally, open trades and active orders initiated prior to November 22nd will also be subject to the new margin requirements.
SECTION TWO: FXCM LTD margin requirements table
The table below shows Forex Capital Markets LTD (FXCM UK) Micro current and new margin requirements.
If you are not sure what entity you are trading with, simply run a combined account statement report via the FX Trading Station or on MyFXCM.com. The entity and address will appear on the footer of the statement.
Micro Account
- USD Account
| Currency Pair (Majors) | Current USD Margin | New USD Margin | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
$2.50 | $4 | ||||||||||||||||||||||
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$2.50 | $4.50 | ||||||||||||||||||||||
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$2.50 | $2.50 | ||||||||||||||||||||||
|
$2.50 | $2.50 | ||||||||||||||||||||||
|
$2.50 | $2.50 | ||||||||||||||||||||||
|
$2.50 | $2.50 | ||||||||||||||||||||||
|
$2.50 | $3 | ||||||||||||||||||||||
|
|
|
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* CURRENT USD MARGIN IS BASED ON AN FXCM LTD MICRO ACCOUNT WITH 0.25% MARGIN.
Based on price fluctuations, all margin Requirements are subject to change without notice based on price fluctuations and will be adjusted up or down in increments of $1 for USD denominated accounts. At present, FXCM does not anticipate that margin requirements will have to be changed more than once a month. Up to date Margin requirements are and will continue to be displayed in the simplified dealing rates window of the trading platform by currency pair.
SECTION THREE: Calculating Your New Margin
Will my positions be margined out?
We recommend WATCHING THIS VIDEO
or following the steps below to find out if your positions will be margined out when the new margin levels take effect.
Step One
- Login to the trading station. Then consult the open positions window to view your live trade details.
Step Two
- On a piece of paper, write down the trade details for each trade you currently have open
Include the currency pair and the trade size, like this: EUR/USD 1,000 (1,000 = 1 lot) - Next, write down the NEW margin requirement for each trade
For example, EUR/USD 1,000 $4 - Next, multiply the NEW margin requirement by the number of lots traded
For example, $4 X 1 lot = $4 - Finally, add up all of the new margin levels that you just calculated. This number is your NEW used margin (USD MR).
- Subtracting this from your equity will give you your usable margin (USBL MR).
*Remember, when your usable margin (USBL MR) drops below zero your live trades will be liquidated.
| CURRENCY PAIR | LOTS TRADED (10K PER LOT) |
CURRENT USD MARGIN |
NEW USD MARGIN |
TOTAL NEW USD MARGIN |
|---|---|---|---|---|
| USD/CAD | 4 | $2.50 | $2.50 | $10 |
| GBP/JPY | 10 | $2.50 | $4.25 | + $42.50 |
| NZD/JPY | 1 | $2.50 | $2.50 | + $2.50 |
| EUR/CHF | 1 | $2.50 | $4 | + $4 |
| EUR/USD | 1 | $2.50 | $4 | + $4 |
| HYPOTHETICAL NEW MARGIN REQUIREMENT TO AVOID LIQUIDATION | = $63 | |||
DEPOSITING ADDITIONAL FUNDS
It might be necessary to add additional funds to your trading account to avoid the possible liquidation of live positions before November 22nd. After using the method outlined above to determine your Total New USD Margin, if your current usable margin (USBL MR) is less than the amount you calculated above, we recommend that you add additional funds to your account.
CLICK HERE to deposit additional funds into your forex trading account.
Without proper risk management, Currency Trading has a high degree of leverage which can lead to large losses as well as gains.