Margin information

Review our margin requirements and other information related to margin trading with Saxo

Initial margin and maintenance margin are designed to protect you against adverse market conditions, by creating a buffer between your trading capacity and margin close-out level.

  1. Initial margin: a pre-trade margin check on order placement, i.e. on opening a new position there must be sufficient margin collateral available on account to meet the initial margin requirement for the entire margin portfolio.
  2. Maintenance margin: a continuous margin check, i.e. the minimum amount of cash or approved margin collateral that must be maintained on account to hold an open position(s). Maintenance margin is used to calculate the margin utilisation, and a close-out will occur as soon as you do not meet the maintenance margin requirement.

Read more about Initial and Maintenance margin here.

The margin requirement on FX options is calculated per currency pair, (ensuring alignment with the concept of tiered margins as per FX spot and forwards) and per maturity date. In each currency pair, there is an upper limitation to the margin requirement that is the highest potential exposure across the FX options and FX spot and forward positions, multiplied by the prevailing spot margin requirement. This calculation also takes into account potential netting between FX options and FX spot and forward positions.

On limited risk strategies, e.g. a short call spread, the margin requirement on an FX options portfolio is calculated as the maximum future loss.

On unlimited risk strategies, e.g. naked short options, the margin requirement is calculated as the notional amount multiplied by the prevailing spot margin requirement.

Tiered margin rates are applicable to the FX options margin calculation when a client's margin requirement is driven by the prevailing FX spot margin requirement, and not the maximum future loss. The prevailing FX spot margin levels are tiered based on USD notional amounts; the higher the notional amount potentially the higher the margin rate. The tiered margin requirement is calculated per currency pair. In the FX options margin calculation, the prevailing spot margin requirement in each currency pair is the tiered, or blended, margin rate determined on the basis of the highest potential exposure across the FX options and FX spot and forward positions.

Example 1: Short Call Spread or Limited Risk strategy

You sell a call spread on 10M USDCAD at strikes 1.41 and 1.42. 
The current spot rate is 1.40. 
The margin requirement will be the maximum future loss of 71,429 USD (10M x (1.42 – 1.41) = 100,000 CAD / USD @ 1.40).

Example 2: Unlimited Downside Risk

You sell a 10M USDCAD put option. You have an unlimited downside risk. The margin requirement is therefore calculated as the notional amount multiplied by the prevailing spot margin requirement.

The prevailing spot margin rate is determined by the highest potential exposure, which is 10M USD. 
Thus, the prevailing spot rate is the blended margin rate of 2.2% ((1% x 3M USD + 2% x 2M USD + 3% x 5M USD) / 10M). 
The margin requirement is therefore 220,000 USD (2.2% x 10M USD).

For additional examples click here.

Collateral rates for margin trading

(Professional clients only)

Saxo allows a percentage of the investment in certain Stocks and ETFs to be used as collateral for margin trading activities. The collateral value of a stock or ETF position depends on the rating of the individual stocks or ETFs – please see conversion table below.

Rating
1
2
3
4
5
6
Collateral value of position
70%
50%
50%
25%
0%
0%

Example: 70% of the value of a position in a Stock or ETF with Rating 1 can be used as collateral (instead of cash) to trade margin products such as Forex, CFDs, Futures and Options. Please note that Saxo reserves the right to decrease or remove the use of Stock or ETF investment as collateral for large position sizes, or stock portfolios considered to be of very high risk.

For a complete list of available stocks, ratings and collateral values, please click here.

For a complete list of available ETFs, ratings and collateral values, please click here.

Saxo allows a percentage of the investment in certain bonds to be used as collateral for margin trading activities.

The collateral value of a bond position depends on the rating of the individual bond, as outlined below:

Rating definition*Collateral percentage
Highest Rating (AAA)95%
Very High Quality (AA)90%
High Quality (A)80%

 

* as rated internally by Saxo Group

Example: 80% of the market value of a bond position with an A rating can be used as collateral (instead of cash) to trade margin products such as Forex, CFDs or Futures and Options.

Please note that Saxo reserves the right to decrease or remove the use of bond positions as collateral.

For further guidance or to request the rating and collateral treatment of a specific or potential bond position, please send an email to fixedincome@saxobank.com or contact your account executive.

Ready to get started?

Opening an account takes around 5 minutes

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.