Margin & Leverage

What is margin?

Margin is equity from your account set aside by SFX to maintain a position when you’re trading on leverage.

What is leverage?

Leverage is the ability to control a large position with a small amount of capital. It is usually denoted by a ratio. For example, if your account has a leverage of 200:1, that means you can trade a position of $50,000 with only $250.

Please note that increased leverage increases risk.

What are the margin requirements at SFX

Our margin requirements differ according to market, asset class and position size. You can find out the specific margin of each instrument in its Market Information Sheet on the SFX desktop platform.

To calculate the amount of funds required to cover the margin requirement when you open a trade, simply multiply the total notional value of your trade (quantity x price of instrument) by the margin factor.

With SFX platforms, you can calculate the required margin before placing a trade through the platform’s margin calculator, monitor each position’s margin requirement separately or review your account’s total margin requirement through the Margin Indicator.

What are step margin levels?

The larger the trade size, the higher the risk level associated with the trade. Therefore, we may increase our margin requirements for larger size trades or any additional trades in that instrument. To do this, SFX increases the size of the margin requirement at specific quantity levels, known as step margin levels. You can view a market’s step margin levels in its Market Information Sheet within the SFX desktop platform.

Step margins are not present in MetaTrader 4.

Can my account go negative?

While our margin requirements, closeout levels and real-time margin system are designed to limit your trading losses, you do risk incurring losses greater than your account balance, especially during periods of extreme market volatility. For this reason, we strongly encourage you to manage your use of leverage carefully.

What is order-aware margining?

Some markets on the SFX desktop platform may benefit from orders-aware margining, which means that placing a stop loss order on an open position will reduce the margin required to maintain that position. Information on whether a market includes orders-aware margining can be found within the Market Information Sheet within the SFX desktop platform.

How is margin handled with hedging?

Hedging margin on SFX’s proprietary platforms is set to the ‘largest leg,’ whereby only the margin for the larger portion of the hedge trade will be applied, and not for the shorter leg.

For example, you are trading CFDs and have two open Wall Street positions, originally selling a quantity of 10 and then buying a quantity of 5. In this case, you would only the margin for the original, larger side of the trade will be applied: the Wall Street short 10 position. Assuming that the margin for selling 10 Wall Street is £1,691.45 and the margin for buying 5 Wall Street is £845.7, you would only need to provide enough margin to cover the original, larger sell position for both of the trades in this market.

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