Margin & Leverage
Discover the margin and leverage conditions offered by FXTRADING.com. We provide clients with the flexibility of trading with leverage ratios of up to 30:1. This empowers traders to amplify the scope of what's at stake.
What are Margin & Leverage?
M&L
Similar to collateral, the margin is the amount of money required to be deposited into a trading account to open a trade, which is usually a fraction of the underlying market cost. Leverage results from using borrowed capital as the source of funds, allowing traders to gain access to larger sums of capital. However, the use of leverage is a double-edged sword, heightening profits and losses at the same time.
Amplify Trades with Margin and Leverage at FXTRADING.com
FXT offers flexible leverage of up to 30:1, as well as live risk exposure management. We have a mandatory 50% margin close-out rule, a margin call level as low as 100%, and provide our clients with negative balance protection. FXT clients can enjoy the opportunity to magnify the potential of their trades.
Trade Instruments with FXTRADING.com
Trade a variety of popular instruments within the ultimate trading environment. Join FXT today and empower your trading journey with world-class trading tools —trade better and smarter with FXT
What is Margin and How is it Calculated?
Similar to collateral, the margin is the amount of money required to be deposited into a trading account to open a trade, which is usually a fraction of the underlying market cost.
Long example: Buying GBP/USD
A trader buys 1 contract of GBP/USD (one contracts equals 100,000 GBP) at $1.2650
-
If GBP/USD rises to $1.2800 (+150 pips) the trader could exit for a profit around $1,500
- (# contracts x contract size) x (exit price - entry price)
- (1 x 100,000) x ($1.2800 - $1.2650) = $1,500
-
If the price falls to $1.2600 the trader could exit for a loss of around -$500
- (# contracts x contract size) x (exit price - entry price)
- (1 x 100,000) x ($1.2600 - $1.2650) = -$500
-
At 400:1 leverage, Just 0.25% of margin ($316.25) is required to open the trade
- (# contracts x contract size x price) / leverage
- (1 x 100,000 x $1.2650) / 400 = $316.25
Short example: Selling USD/JPY
A trader sells 5 contracts of USD/JPY (one contracts equals 100,000 USD) at ¥107.25
-
IF USD/JPY falls to ¥106.50 (-75 pips) the trader could ‘exit for a profit around $3,500
- (# contracts x contract size) x (entry price - exit price)
- (5 x 100,000) x (¥107.25 - ¥106.50) = ¥375,000 ($3,500)
-
If the price rises to ¥107.70 the trader could exit for a loss around $2,100
- (# contracts x contract) x (entry - exit price)
- (5 x 100,000) x (¥107.25 - ¥107.70) = -¥225,000 (-$2,100)
-
At 400 leverage, just 0.25% of margin ($1,250) is required to open the trade
- (# contracts x contract size x price) / leverage
- (5 x 100,000 x ¥107.25) / 400 = ¥134,062.50 ($1,250)
What is Leverage and How is it Calculated?
Leverage results from using borrowed capital as the source of funds, allowing traders to gain access to larger sums of capital. However, the use of leverage is a double-edged sword heightening profits and losses at the same time,
Take as an example a $5000 forex trading account with 100:1 leverage. If $2,000 is used to trade forex on margin with 100:1 leverage, the trader will have exposure of $200,000 in base currency. To calculate exposure use the following equation: Margin × Leverage = Exposure Consequently: $2,000 margin × 100 leverage = $200,000 of exposure in base currency
Stop-out Level
FXTRADING.com's stop-out level for clients is 50% This means that when the margin level falls to 50% (equity/ margin), open positions would be automatically closed until the margin level goes above 100%, Trades will be closed in order of largest to smallest, until the margin level (maintenance margin) is at 100% or greater
ASIC Regulatory Update
The Australian Securities and Investments Commission (ASIC) recently released changes to current regulations surrounding CFD products for retail clients. You can read ASIC’s announcement here
What are the changes?
From 29 March 2021, ASIC's changes are:
Margin Close-out Percentages
Standardise CFD issuers margin close-out arrangements that act as a circuit breaker to close-out one or more a retail client's CFD positions before all or most of the client's investment is lost.
Negative Balance Protection
Protects against negative account balances by limiting a retail client's CFD losses to the funds in their CFD trading account.
Promotional offers
Prohibits giving or offering certain inducements to retail clients (for example offering trading credits and rebates or free gifts like iPad)
Leverage Ratio Limits
30:1 for CFDs referencing an exchange rate for a major currency pair
20:1 for CFDs referencing an exchange rate for a minor currency pair. gold or a major stock market index
10:1 for CFDs referencing a commodity (other than gold or a minor stock market index)
2:1 for CFDs referencing crypto-assets
5:1 for CFDs referencing shares or other assets
Relevant Regulations
At FXTRADING.com, retail clients are under various regulatory and financial protections. According to the regulatory requirements of our licensing, clients are entitled to receive different protections based on where you choose to open your accounts. Additionally, we strictly adhere to the latest regulations prohibiting 'margin discounts' to retail clients with opposing long and short contracts, ensuring a secure and compliant trading environment.
Please note, the regulatory requirements below are for retail traders deciding to use our services. This information is not intended for distribution or use by any person in any country where that distribution or use would contravene local laws
| Up to 29 March 2021 | From to 29 March 2021 | |
|---|---|---|
| Regulator | ASIC | ASIC |
| Location | Australia | Australia |
| Leverage restrictions - Major currency pairs |
Up to 1:500 | Up to 1:30 |
| Leverage restrictions - Minor currency pairs and Gold |
Up to 1:500 | Up to 1:20 |
| Leverage restrictions - Major stock market index |
Up to 1:500 | Up to 1:20 |
| Leverage restrictions - Commodities (other than gold) |
Up to 1:500 | Up to 1:10 |
| Leverage restrictions - Minor stock market index |
Up to 1:500 | Up to 1:10 |
| Leverage restrictions – Crypto-assets | Up to 1:5 | Up to 1:2 |
| Leverage restrictions – Shares | Up to 1:100 | Up to 1:5 |
| Negative balance protection | – | |
| Mandatory 50% margin close out rule | ||
| Platforms available | MT4 | MT4 |
| External dispute resolution | Australian Financial Complaints Authority(AFCA) | Australian Financial Complaints Authority(AFCA) |
| URLs |
https://fxtrading.com/au/
https://fxtrading.com/au/zh/ |
https://fxtrading.com/au/
https://fxtrading.com/au/zh/ |
| Client Money Protection | Yes, client money must be held in segregated bank accounts | Yes, client money must be held in segregated bank accounts |
| Regulator | ASIC |
|---|---|
| Location | Australia |
| Leverage restrictions - Major currency pairs |
Up to 1:500 |
| Leverage restrictions - Minor currency pairs and Gold |
Up to 1:500 |
| Leverage restrictions - Major stock market index |
Up to 1:500 |
| Leverage restrictions - Commodities (other than gold) |
Up to 1:500 |
| Leverage restrictions - Minor stock market index |
Up to 1:500 |
| Leverage restrictions – Crypto-assets | Up to 1:5 |
| Leverage restrictions – Shares | Up to 1:100 |
| Negative balance protection | – |
| Mandatory 50% margin close out rule | |
| Platforms available | MT4 |
| External dispute resolution | Australian Financial Complaints Authority(AFCA) |
| URLs |
https://fxtrading.com/au/
https://fxtrading.com/au/zh/ |
| Client Money Protection | Yes, client money must be held in segregated bank accounts |
| Regulator | ASIC |
|---|---|
| Location | Australia |
| Leverage restrictions - Major currency pairs |
Up to 1:30 |
| Leverage restrictions - Minor currency pairs and Gold |
Up to 1:20 |
| Leverage restrictions - Major stock market index |
Up to 1:20 |
| Leverage restrictions - Commodities (other than gold) |
Up to 1:10 |
| Leverage restrictions - Minor stock market index |
Up to 1:10 |
| Leverage restrictions – Crypto-assets | Up to 1:2 |
| Leverage restrictions – Shares | Up to 1:5 |
| Negative balance protection | |
| Mandatory 50% margin close out rule | |
| Platforms available | MT4 |
| External dispute resolution | Australian Financial Complaints Authority(AFCA) |
| URLs |
https://fxtrading.com/au/
https://fxtrading.com/au/zh/ |
| Client Money Protection | Yes, client money must be held in segregated bank accounts |
View FXTRADING.com Trading Conditions
Serious about Trading?
Trade your way, on your terms, using your own strategies.
Let’s call that a perfect partnership
