Saturday 23rd of September 2017


About Margin

Margin is the amount of collateral to cover any credit risks arising during your trading operations. Forex margin can be rather high, and the bigger it is, the more risk it imposes, but it also allows a bigger profit.

Margin is expressed as the percentage of position size (e.g. 5% or 1%), and the only real reason for having funds in your trading account is to ensure sufficient margin. On a 1% margin, for instance, a position of $1,000,000 will require a deposit of $10,000.

About Leverage

In the forex market, leverage is used by investors to profit from the exchange rate fluctuations between two different countries. A great advantage is that it is exactly the forex market where investors can obtain the highest leverage.

Using leverage means that you can trade positions larger than the amount of money in your trading account. Leverage amount is expressed as a ratio, for instance 50:1, 100:1, or 500:1. Assuming that you have $1,000 in your trading account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate 500:1.

Margin Call And Margin Cut Policy

Margin call (Use of leverage >100%) means a situation where the margin requirements do not allow the client to increase exposure on his account. The client may only execute trades to reduce exposure, by closing or hedging the existing net positions. Despite the margin call level being reached, the positions will not be closed automatically. The automated system will cancel all placed bid/offer orders that can increase the exposure.

Margin cut or cut-off level (Use of leverage ≥ 200%) - if the Use of Leverage reaches or exceeds 200%, Dukascopy Bank has the right (but not the obligation) to fully or partially reduce the client's exposure by closing existing positions and/or by opening new positions in the opposite direction. Usually the system automatically reduces exposure so that the Use of Leverage is brought to approximately 100%. However, traders can select to fully close all open positions in case of a margin cut.

Risk disclosure

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. It is highly recommended to maintain the Use of Leverage at normal levels. The client must always keep in mind that leverage increases potential loss, as well as potential profit, and invested funds can quickly suffer losses in situations where the market prices exhibit strong volatility, potentially creating an adverse environment for the highly leveraged participant. The client shall be solely responsible for maintaining sufficient margin in relation to the existing positions.

Why GI Partners

Offering some of the tightest spreads and lowest margins across the industry.

  • Providing you with competitive spreads
  • Help you make better-informed trading decisions
  • Excellent products and quality service
  • Providing trading mobile application download
  • Client funds are held in segregated accounts