Margin requirements

Unlike most of its competitors, City Index FX Trader calculates margin in real-time, based on the currency pair traded. Margin required is affected by changes in the market rate.

For non-Dollar based currency pairs the margin required will be converted into U.S. Dollars at the prevailing market price for that pair. For example, the margin required to place a trade of GBP 100,000 is not the same as the margin needed for a trade of USD100,000.

Once the equity in an account falls below the margin required to maintain all existing positions, a margin call is triggered and all open trades will be closed at the prevailing market rates.

Example

A client places a trade to sell GBP/USD 100,000 at 2.0350, with GBP/USD trading at 2.0350 / 2.0355. Leverage selected on the account is 100:1.

The margin required is GBP100,000 /100 = GBP 1,000. Since this currency pair is not Dollar-based the margin must be converted into Dollars to correctly reflect the risk.

GBP 1,000 X 2.03525 (mid-rate of pair traded 2.0350/2.0355) = $2,035.25.

The margin required to place this trade would be GBP1,000 or $2,035.25.

Please be aware that this margin is marked-to-market in real time for the life of the trade, which is standard market protocol.

Therefore, if the GBP/USD mid-price increased theoretically to 2.0700, the margin required to maintain the trade would be GBP 1,000 x 2.0700 or $2,070. If the price fell to 1.9500 then the required margin would decrease accordingly.