Margin and Account Leverage

WHAT IS REQUIRED TO MANAGE EXPOSURE?

You will require sufficient funds in your trading account in order to support all open positions to avoid liquidation. This shall remain your responsibility to monitor and take inject further funds where applicable.

When you place a trade you must have sufficient available equity to cover the margin costs, or requirement of that position. The margin requirement level must be maintained over and above any profit or losses on your account.

Margin requirements vary by product and range from 0.20% to 5%. Please refer to the Markets section of our website to see the most up to date information about all our products, including margin requirements.

If you have any further questions, please click here to start a live chat with one of our representatives now.

How do I calculate my margin requirement?

Margin requirement on our FX products (including Bullion) are calculated using the base currency price.

Base currency (also known as the transaction currency) is the first currency appearing in a currency pair quotation, The second part of the quotation is known as the quote currency or the counter currency.

The rate will then be converted to USD using the prevailing market rate.

Margin Requirements are calculated as follows:

Lots * Contract Size (in base currency) * Margin requirement

Example 1: Base currency is not USD

Order: Buy 1 lot NZDCAD
Base currency: NZD
Contract Size: 100 000
NZDUSD rate: 0.7088
Margin requirement (1 lot): 0.4%

1 * 100 000 NZD * 0.4% = NZD 400

Margin requirement = NZD 400 * 0.7088 = USD 283.52

Example 2: Base currency is USD

Order: Buy 1 lot USDJPY
Base currency: USD
Contract Size: 100 000
Margin requirement (1 lot): 0.25%

1 * 100 000 USD * 0.25% = USD 250

Margin requirement = USD 250

 

How do I calculate my Equity Margin Ratio (E/M) for a Margin Call?

The EM ratio is calculated as follows:

Free Equity (Cash Balance + Credit +/– Floating P&L)/Margin)*100

Floating loss is ≥ (Balance + Credit) – (liquidation level x margin)

If you have any further questions, please click here to start a live chat with one of our representatives now.

What happens if my margin requirement falls below the required level?

Positions will be closed automatically (liquidated) when the Equity/Margin (EM) ratio of your account reaches the predetermined liquidation level. Please refer to our Liquidation Procedures for more information.

If you have any further questions, please click here to start a live chat with one of our representatives now.

WILL I RECEIVE MARGIN CALL NOTIFICATIONS?

For standard accounts, you will receive a margin call email when the equity level on your account falls below 100% of the margin requirement.

However, please note that you are responsible at all times for maintaining adequate margin in your account and you should not rely solely on us to monitor your account or advise you of the requirement to deposit funds. One Financial Markets will not be held liable for losses resulting from non-receipt of margin call emails.

If you have any further questions, please click here to start a live chat with one of our representatives now.

What is the leverage on my account?

Account leverage is dependent on the product. Please refer to the markets page of our website to see our current leverage / margin requirements. You may reduce the leverage on your account but it cannot be increased. Please contact our dealing desk at dealers@ofmarkets.com for further assistance.

If you have any further questions, please click here to start a live chat with one of our representatives now.

WHAT IS TIERED MARGIN AND HOW DOES IT WORK?

One Financial Markets is introducing a new tiered margin requirement across a number of products. This means that the margin required to support open positions shall be determined by the size of your net market position. The larger the positions, the more margin will be required to support your trades.

To illustrate how tiered margin requirements work, please see the following example below.

EUR/USD

 
Tier 1
Tier 2
Tier 3
Tier 4
No.of LotsMargin ChargedNo, of LotsMargin ChargedNo. of LotsMargin ChargesNo. of LotsMargin Charged
EURUSD0 - 1500.25%150 - 3000.50%300 - 6002.00%600+4.00%

 

Tier 1

The first 150 lots on the account are charged at the standard rate of 0.25%, therefore the margin charged will be as follows:

150 * 100 000 EUR * 0.25% = EUR 37,500

Margin Requirement = EUR 37,500 * 1.07375 = $40,265.63

 EURUSD - Tier 1

 

Once you start to trade more than 150 lots this is where the tiered margin comes in and you are charged higher margin to hold larger positions, please see the example below for tier 2 – 4 of margin charged:

Tier 2

The first 150 lots have been charged at $40,265.63, therefore the 2nd 150 lots on the account will be charged as follows:

$120,796.31 - $40,265.63 = $80,530.68

This can be checked as follows:

150 * 100 000 EUR * 0.50% = EUR 75,000

Margin Requirement = EUR 75,000 * EURUSD Rate = $80,530.68

EURUSD - Tier 2

 

Tier 3

The first 300 lots have been charged at $120,796.31, therefore the next 300 lots on the account are charged as follows:

$765,094.97 - $120,796.31 = $644,298.66

This can be checked as follows:

300 * 100 000 EUR * 2.00% = EUR 600,000

Margin Requirement = EUR 600,000 * EURUSD Rate = $644,298.66

EURUSD Tier 3

 

Tier 4

The final tier takes into consideration anything above 600 lots; therefore where there is 1000 lots on the account, the margin is charged as follows:

$2,483,223.78 - $765,094.97 = $1,718,128.81

This can be checked as follows:

400 * 100 000 EUR * 4.00% = EUR 1,600,000

Margin Requirement = EUR 1,600,000 * EURUSD Rate = $1,718,128.81

EURUSD Tier 4

 

XAUUSD

The margin rates charged for XAUUSD have been provided in the table below:

 

 

Tier 1

Tier 2

Tier 3

Tier 4

No. of Lots

Margin Charged

No. of Lots

Margin Charged

No. of Lots

Margin Charged

No. of Lots

Margin Charged

XAUUSD

0 - 20

0.50%

20 - 50

1.00%

50 - 200

2.50%

200+

5.00%

 

Tier 1

The first 20 lots on the account are charged at the standard rate of 0.50%, therefore the margin charged will be as follows:

Margin Required: 20 Lots * 0.5% = $10,000

XAUUSD Tier 1

 

Once you start to trade more than 20 lots, this is where the tiered margin comes in and you are charged a higher rate of margin to hold larger positions. Please see the example below for tier 2 – 4 of margin charged:

Tier 2

After being charged $10,000 for holding the first 20 lots, the next tier takes into consideration lots 20 – 50. If you now trade another 30 lots (total now 50 lots on the account), you will be charged the following margin:

Margin Required: 30 Lots * 1.00% = $30,000

XAUUSD Tier 2

 

Tier 3

Tier 3 incorporates the next 150 lots and this is charged at 2.5% margin rate. You will be charged the following margin:

Margin Required: 150 Lots * 2.50% = $375,000

 

XAUUSD Tier 3

 

Tier 4

Tier 4 incorporates anything above 200 lots and this is charged at 5.0% margin rate. You will be charged the following margin:

For the purpose of this example there is 300 lots on the account.

Margin Required: 100 Lots * 5.00% = $500,000

XAUUSD Tier 4

 

DOW30

The margin rates charged for DOW30 has been provided in the table below to illustrate how the number of CFDs traded will change the margin that you will be charged:

 

Tier 1

Tier 2

Tier 3

No. of Lots

Margin Charged

No. of Lots

Margin Charged

No. of Lots

Margin Charged

DOW30

0 - 750

0.50%

750 - 1500

1.00%

1500+

2.00%

 

Tier 1

The first 750 CFDs on the account are charged at the standard rate of 0.5%, therefore the margin charged will be as follows:

Margin Required: 750 CFDs * 20119 * 0.50% = $75,446.25

DOW 30 Tier 1

 

Tier 2

After being charged $75,446.25 for the first 750 CFDs of the product, the next 750 CFDs will be charged at a higher rate which can be seen from the table above:

Margin Required: 750 * 20120 * 1.00% = $150,900.00

DOW 30 Tier 2

 

Tier 3

The final tier will take into consideration 1500+ CFDs on the account. For the purpose of this example, another 750 CFDs has been added, making the total on the account 2,250 CFDs:

Margin Required: 750 * 20120 * 2.00% = $301,800.00

DOW30 Tier 3

Contracts for Difference (CFDs) and margined FX are leveraged products which carry a high degree of risk to your capital. Prices may move rapidly against you and may result in you losing more than your initial deposit. CFDs and FX may not be suitable for all investors and you should fully understand the risks involved before opening an account. Please read the Risk Warning Notice on our website.

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One Financial Markets is the trading name of C B Financial Services Ltd, a company registered in England with company number 6050593. C B Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Services Board in South Africa (with FSP number 45784).

One Financial Markets (DIFC) Ltd is a company registered in the Dubai International Financial Centre at Index Tower, Level 10, Office 1008, PO Box 507147, Dubai, United Arab Emirates. One Financial Markets (DIFC) Ltd is regulated by the Dubai Financial Services Authority.

One Financial Markets (Asia) Ltd is an approved introducing agent of One Financial Markets, authorised and regulated by the Hong Kong Securities and Futures Commission (with SFC CE No BFZ621).

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