About Margin

Trading on margin allows you to open a position by only depositing a percentage of the full value of the position. Margin is used to cover any credit risks that arise during your trading.

Margin Requirements (and the associated Margin Percentage) vary with each Product. A list of the requirements is set out on the Trading Platform. These may change regularly.

Margin Percentage

At BCR, the margin requirement (per lot) is either represented as a floating amount or a percentage.

For example, using 200:1 leverage, if the price of EURUSD is 1.18992, and a client opens 1 lot of EURUSD (1 lot = 100,000 Units of the base currency), then the margin requirement is $594.96 (1.18992 * 100,000 / 200).

The margin requirement for US stocks is a fixed percentage (10%). If the price of Apple Inc. stock (#AAPL) is $174.54 per share, and a client trades 0.5 lot (1 lot = 100 contracts = 100 shares), then the margin requirement is $872.70 (0.5 * 100 * 174.54 * 10%).

As you can see in the above example, the margin requirement to open a position can be dynamic if it is represented as a percentage.

Leverage

Leverage is another expression of margin percentage.

Leverage = 1 / Margin Percentage.

For example, the margin requirement for #AAPL is 10%. It means that Leverage for #AAPL is 10:1.

Please review our Contract Specifications for our latest Leverage Settings.

Hedging

Hedging is taking on both Long and Short positions of the same size in the same product simultaneously in order to reduce the risk in an adverse market. This involves opening a position in the opposite direction of the same size as the initial opened position. The margin requirement for holding hedged positions is 0.

Liquidation / Stop-out Level

The trading platform will automatically begin to liquidate open orders when the client's Total Equity balance falls below 50% of the Initial Margin Requirement. The trading platform will liquidate individual positions until the remaining Client Total Equity is sufficient to support existing open position(s). In deciding what positions will be individually liquidated the largest losing position will be closed first during liquidation.

Similarly, the margin in your trading account needs to be more than 50% for open positions in order to be able to open new trades, unless the new trades will result in current positions being partially or fully hedged.

BCR provides different margin and leverage for different instruments. To view BCR Margin Requirement, click on the Instruments below. It is strongly advised that clients always maintain the appropriate amount of margin in their accounts.