Review our margin requirements and other information related to margin trading with Saxo
To create a buffer between your trading capacity and the margin close-out level, which ESMA has standardised, we apply two different margin requirements:
- 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.
- Maintenance margin: a continuous margin check, i.e. the minimum amount of margin collateral that must be held on account to maintain an open position(s). Maintenance margin is used to calculate the margin utilisation.
Margin requirements differ by currency pair and depend on the exposure in the currency pair. Margin requirements may be subject to regulatory mandated minimums and may be subject to change according to the underlying liquidity and volatility of the currency pair. For this reason, the most liquid currency pairs (the majors) in most cases require a lower margin requirement.
Saxo offers tiered margin methodology as a mechanism to manage political and economic events that may lead to the market becoming volatile and changing rapidly. With tiered margin, the average margin requirement (‘Blended Margin Requirement’) increases with the level of exposure. The opposite is also true; as the level of exposure decreases the margin requirement also decreases. This concept is illustrated below:
The different levels of exposure (or tiers) are defined as an absolute number of U.S. Dollars (USD) across all currency pairs. Each currency pair has a specific margin requirement in each tier.
Please note that margin requirements may be changed without prior notice. Saxo reserves the right to increase margin requirements for large position sizes, including client portfolios considered to be of high risk.
Collateral rates for margin trading
Please note, from 14 October 2019 at 14:00 GMT, only clients who are classified as Professional are allowed to use non-cash collateral (e.g. stocks/bonds) for margin trading.
Clients who are classified as Retail, are required to use cash as collateral for margin trading.
Saxo Bank 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.
|Collateral value of position|
Example: 75% 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 Bank 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 Bank 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%|
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 Bank 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 email@example.com or contact your account executive.
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