OANDA fxTrade Margin Rules

 

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United States

Avoid margin closeouts. Know about margin and how it works.

The OANDA fxTrade platform supports margin trading, which means you can enter into positions larger than your account balance. One advantage of margin-based trading is that you can leverage the funds in your account and potentially generate large profits relative to the amount invested. The downside is that you have an equal opportunity to incur significant losses in your account. It is a good practice to utilize stop loss orders to limit potential losses when utilizing leverage.  Stop Loss orders are not guaranteed; gaps in market pricing may cause your Stop Loss orders to be filled at a less advantageous price. The Forex Orders Types page provides more detail on stop losses and other orders.

What is Margin?

Margin: A good faith deposit or performance bond. In leveraged trading, the margin amount is held in deposit while the trade is open. The amount of margin required to enter a trade is determined by the rules discussed below. Although there is no minimum margin deposit required to open an fxTrade account with OANDA, the Margin Available in your account will limit the size of the positions you can open.

Leverage: The reciprocal of Margin. For example, 2% margin is the same as 50:1 leverage. The maximum leverage allowed is determined by the regulators in each geographic region. Clients and OANDA may choose to be conservative and limit leverage utilized to lower levels than allowed by the regulators.

Net Asset Value: The reciprocal of Margin. For example, 2% margin is the same as 50:1 leverage. The maximum leverage allowed is determined by the regulators in each geographic region. Clients and OANDA may choose to be conservative and limit leverage utilized to lower levels than allowed by the regulators.

Regulatory Margin Requirement: The minimum margin required by the regulator for the instrument.   The fxTrade Margin Requirements page lists the Regulatory Margin Requirements for each instrument.

Margin Requirement: The margin required for the instrument in your account.  This is the greater of the Regulatory Margin Requirement for the instrument and the margin you selected for your account.  For example, if the regulator requires 2% (50:1 leverage) on EUR/GBP, and you selected 5% margin (20:1) leverage for your account, your Margin Requirement for the instrument will be greater of the two, which is  5%.

Margin Used: The Margin Used represents how much of your Net Asset Value is currently held as margin against your open positions.  The Margin Used is equal to the position size multiplied by the Margin Requirement, summed up over all open positions.  This amount is then converted into the currency of the account using the current midpoint rate. See the Margin Used Calculation Example below for an example on how to calculate your margin used. 

Margin Available: The Margin Available value is the greater of 0 and your Net Asset Value minus your Margin Used. 

Margin Closeout Value: The Margin Closeout Value is equal to your balance plus your unrealized P/L from all open positions, converted into the currency of the account, all calculated using the current midpoint rates. See the Margin Closeout Value Calculation Example below for an example of how to calculate your account equity.

Initial Margin: The Initial Margin for a trade is equal to the trade size multiplied by the Margin Requirement.  This amount is then converted into the currency of the account. When opening a new trade, your Initial Margin must be less than or equal to your Margin Available.  If your Initial Margin is greater than your Margin Available, you cannot open the trade.

Margin Closeout: If your Margin Closeout Value falls to less than half of your Margin Used, all open positions will be automatically closed using the current fxTrade rates at the time of closing. If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains under-margined.

Note about Margin Closeouts: In a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the “Margin Closeout Percent” field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

Regulatory Margin Used: The Regulatory Margin Used is equal to the position size multiplied by the Regulatory Margin Requirement specified by the regulator, summed up over all open positions. This amount is then converted into the currency of the account.

Margin Call: At 4:00PM ET daily, you will receive a Margin Call alert by email if your Margin Closeout Value is less than your Regulatory Margin Used. When you receive a Margin Call alert by email, you are required to deposit additional funds or close open positions to return your Margin Closeout Value to greater than your Regulatory Margin Used. Should you use your own margin requirements that are more conservative than the Regulatory Margin Requirements, you may not receive one of these margin calls and should only expect them when the account falls below the regulatory value.

OANDA will send daily margin call emails to accounts that fall below margin requirements at 4:00 PM ET. When an account remains under-margined for 2 consecutive trading days, all open positions will be automatically closed using the current fxTrade rates at the time of closing. If trading is unavailable for certain open positions at this time, they will be automatically closed using the current fxTrade rates when the markets for those instruments re-open.

Margin Requirement is checked at 4:00 PM ET. Even if the account satisfies the Margin Requirement during the day but falls below for the 4 PM ET check, the account will be considered undermargined.

Note about Margin Call: It is important to note that Margin Calls are calculated only using the Regulatory Margin Requirements.  If you have selected a Margin Requirement that is more conservative than the Regulatory Margin Requirement, you may not receive any Margin Call alerts.

Margin Used Calculation Example:

You have a USD account with maximum leverage set to 20:1 and a long 10,000 EUR/GBP open position. The current rate for EUR/USD is 1.1320/1.1321, therefore the current midpoint rate of EUR/USD is 1.13205.
For the leverage calculation, the lower of the maximum regulated leverage and your selected leverage is used. The regulator allows 50:1 leverage on EUR/GBP, but because you have selected a 20:1 leverage for your account, a leverage of 20:1 (or 5% margin requirement) is used.
Your margin used is position size x Margin Requirement = 10,000 EUR x 5% = 5,000 EUR. The Margin Used in your account currency = 5,000 x 1.13205 = 5,660.25 USD.

Margin Closeout Value Calculation Example

You have a USD account with balance of 1,000 USD and a long 10,000 EUR/USD open position opened at a rate of 1.1200. The current rate of EUR/USD is 1.13200/1.13210, therefore the current midpoint rate of EUR/USD is 1.13205.
Your unrealized P/L calculated by the current midpoint rate is (current midpoint rate – open rate) x position size = (1.13205 – 1.1200) x 10,000 = 120.50 USD.
Your Margin Closeout Value is 1,000 + 120.50 = 1,120.50 USD.

OANDA's Margin Requirements

Governed by the National Futures Association (NFA), OANDA Corporation establishes margin rates and maximum leverage at their discretion.

See the OANDA Corporation margin rates list.

What Happens with a Margin Closeout?

You must maintain sufficient margin in your account to support your open positions. You are responsible for monitoring your account to prevent margin closeouts.

A margin closeout will be triggered in the following circumstances:

  • When the Margin Closeout Value declines to half, or less than half, of the Margin Used. The fxTrade platform will try to alert customers who are signed in to the fxTrade platform when the Margin Closeout Value falls within 5% of a margin closeout, and again when the Margin Closeout Value falls within 2.5% of a margin closeout. When the Margin Closeout Value declines to half, or less than half, of the Margin Used, all tradable open positions in the account will automatically close using the current fxTrade rates at the time of closing. If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains undermargined.

Please note: in a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the "Margin Closeout Percent" field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

  • OANDA will send daily emails to accounts that fall below margin requirements at 4 p.m. Eastern time. When an account remains undermargined for 2 consecutive trading days, all tradable open positions in the account will automatically close using the current fxTrade rates at the time of closing. Any remaining open positions will automatically close at the current fxTrade rate when the markets for those instruments re-open.

For example, if your account remains undermargined, starting on Monday before 4 p.m., an automatic margin closeout will occur on Wednesday at 4 p.m. unless a margin closeout occurs earlier due to the Margin Closeout Value declining to half, or less than half, of the Margin Used. Saturday and Sunday do not count towards the 2 consecutive days as trading is not available on weekends (see OANDA Hours of Operation). If the account recovers before the end of 2 consecutive trading days by meeting the margin requirements at the 4:00 PM ET daily margin check, a new count will start again from the day the account falls below margin requirements again. For example, if your account is undermargined on Monday at 4 p.m., recovers and is adequately margined on Tuesday at 4 p.m., and then falls below margin requirements again on Wednesday before 4 p.m. and continuously remains undermargined, a margin closeout will occur 2 days later on Friday starting at 4 p.m.

See more detailed information on how to calculate margin.

How to Avoid Margin Closeouts

Take proactive measures to avoid getting a margin closeout on your account. For example,

  • Monitor the status of your account continuously.
  • Use a lower leverage so you can impose a higher margin requirement on yourself. This way, you will not be tempted to enter into positions beyond your comfortable leverage level. You will also be aware of a potential margin closeout sooner, and be able to increase leverage as a last resort to head it off.

Note: If you choose a lower leverage, constant monitoring is still required to avoid margin closeouts.

  • Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. (Click on an open trade in the "Trades" table, then click "Modify" in the pop-up window to change the stop-loss.). Stop Loss and Take Profit orders are not guaranteed; gaps in market pricing may cause your Stop Loss orders to be filled at a less advantageous price, or your Take Profit orders to be filled at a more advantageous price than the level you specify.

Note: Your trade is closed at the current fxTrade rate, which may vary from your stop loss price -- especially when trading resumes after periods of market closure.

If you happen to be close to a margin closeout, the unique features of the fxTrade platform provide some simple strategies to avoid it:

  • Incrementally reduce the size of your positions as you get close to a margin closeout. (fxTrade allows you to trade in arbitrary units, as opposed to fixed lots, which makes this simple to do.)

For example, if you get a margin warning, reduce the size of all your open positions by 10%. This effectively lowers the amount of margin required, giving you more breathing room.

  • Close individual positions to reduce the amount of margin required.
  • If you are using a lower leverage, you can increase the leverage on your account as a last resort.
  • Transfer additional funds into the account from another subaccount.
  • Add funds to the account. Note, however, that the time it takes to add funds could mean your funds arrive too late.
Nobody Profits from Margin Closeouts!

Some people erroneously believe that OANDA might benefit from a client getting a margin closeout. The truth is that OANDA does not benefit at all. Traders who lose money have less money to use for trading and may reduce their trading activity. As a company, OANDA benefits most when its customers are trading.

The bottom line is that each margin closeout harms a client and it harms OANDA. But it also protects clients from greater losses.


Canada

Avoid margin closeouts. Know about margin and how it works.

The OANDA fxTrade platform supports margin trading, which means you can enter into positions larger than your account balance. One advantage of margin-based trading is that you can strongly leverage the funds in your account and potentially generate large profits relative to the amount invested. The downside is that you can potentially incur significant losses in your margin capital very quickly.

What is Margin?

To ensure you can cover any losses you might incur on your positions, OANDA requires sufficient collateral. This collateral is typically referred to as margin. Although there is no minimum deposit required to open an fxTrade account with OANDA, the Margin Available in your account will limit the size of the positions you can open.

The term leverage is often used to describe the margin requirements. For example, leverage of 50:1 corresponds to a margin requirement of 2% (1 divided by 50 is 0.02 or 2%). A 2% margin requirement means that, if you wish to open a new position, then you must have 2% of the size of that position available as margin. Another way of saying the same thing: for each dollar of margin available you can make a $50 dollar trade.

Nobody Profits from Margin Closeouts!

Some people erroneously believe that OANDA might benefit from a client getting a margin closeout. The truth is that OANDA does not benefit at all. Traders who lose money have less money to use for trading and may reduce their trading activity. As a company, OANDA benefits most when its customers are trading.

The bottom line is that each margin closeout harms a client and it harms OANDA. But it also protects clients from greater losses.

OANDA Canada Margin Requirements

The Investment Industry Regulatory Organization of Canada (IIROC) establishes margin rates, which may vary from time to time. Margin requirements also vary given the base currency of your account.

See the Canadian margin rates list.

How Margin is Calculated

When you have open trades for many different currency pairs, your account’s margin requirement is calculated by weighting the margin requirements for the various trades at their respective sizes and rates.

If this calculation is less than the margin requirement for the leverage set on your account, it takes precedence (if it is higher, then your default leverage is used).

For example, if you are trading pairs with a minimum 3% margin rate (or 33:1 leverage) and you’ve set your leverage at 10:1, the required margin will be 10% rather than the 3% minimum required by regulation.

See more detailed information on how to calculate margins.

What Happens with a Margin Closeout?

You must maintain sufficient margin in your account to support your open positions. You are responsible for monitoring your account to prevent margin closeouts.

A margin closeout will be triggered in the following circumstances:

  • When the Margin Closeout Value declines to half, or less than half, of the Margin Used. The fxTrade platform will try to alert customers who are signed in to the fxTrade platform when the Margin Closeout Value falls within 5% of a margin closeout, and again when the Margin Closeout Value falls within 2.5% of a margin closeout. When the Margin Closeout Value declines to half, or less than half, of the Margin Used, all tradable open positions in the account will automatically close using the current fxTrade rates at the time of closing. If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains undermargined.

Please note: in a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the "Margin Closeout Percent" field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

  • OANDA will send daily emails to accounts that fall below margin requirements at 4 p.m. Eastern time. When an account remains undermargined for 7 consecutive trading days, all tradable open positions in the account will automatically close using the current fxTrade rates at the time of closing. Any remaining open positions will automatically close at the current fxTrade rate when the markets for those instruments re-open.

For example, if your account remains undermargined, starting on Monday before 4 p.m., an automatic margin closeout will occur on the following Tuesday at 4 p.m.. It is still possible for an account to also receive a margin closeout earlier due to the Margin Closeout Value declining to half, or less than half, of the Margin Used. Saturday and Sunday do not count towards the 7 consecutive days as trading is not available on weekends (see OANDA Hours of Operation). If the account recovers by 4 p.m. on a trading day, before the end of 7 consecutive trading days, a new count will start again from the day the account falls below margin requirements. For example, if your account is undermargined on Monday at 4 p.m., recovers and is adequately margined on Wednesday at 4 p.m., and then falls below margin requirements again on Friday before 4 p.m. and continuously remains undermargined, a margin closeout will occur 10 days later on Monday starting at 4 p.m.

See more detailed information on how to calculate margin.

How to Avoid Margin Closeouts

Take proactive measures to avoid getting a margin closeout on your account. For example,

  • Monitor the status of your account continuously.
  • Use a lower leverage so you can impose a higher margin requirement on yourself. This way, you will not be tempted to enter into positions beyond your comfortable leverage level. You will also be aware of a potential margin closeout sooner, and be able to increase leverage as a last resort to head it off.

Note: If you choose a lower leverage, constant monitoring is still required to avoid margin closeouts.

  • Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. (Click on an open trade in the "Trades" table, then click "Modify" in the pop-up window to change the stop-loss.)

Note: Your trade is closed at the current fxTrade rate, which may vary from your stop loss price -- especially when trading resumes after periods of market closure.

If you happen to be close to a margin closeout, the unique features of the fxTrade platform provide some simple strategies to avoid it:

  • Incrementally reduce the size of your positions as you get close to a margin closeout. (fxTrade allows you to trade in arbitrary units, as opposed to fixed lots, which makes this simple to do.)
  • Close individual positions to reduce the amount of margin required.
  • If you are using a lower leverage, you can increase the leverage on your account as a last resort.
  • Transfer additional funds into the account from another subaccount.
  • Add funds to the account. Note, however, that the time it takes to add funds could mean your funds arrive too late.

Europe

Avoid margin closeouts. Know about margin and how it works.

The OANDA fxTrade platform supports margin trading, which means you can enter into positions larger than your account balance. One advantage of margin-based trading is that you can strongly leverage the funds in your account and potentially generate large profits relative to the amount invested. The downside is that you can potentially incur significant losses in your margin capital very quickly. You may lose more than you invest.

What is Margin?

To ensure you can cover any losses you might incur on your positions, OANDA requires sufficient collateral. This collateral is typically referred to as margin. Although there is no minimum margin deposit required to open an fxTrade account with OANDA, the margin available in your account will limit the size of the positions you can open.

The term leverage is often used to describe the margin requirements. For example, leverage of 50:1 corresponds to a margin requirement of 2% (1 divided by 50 is 0.02 or 2%). A 2% margin requirement means that, if you wish to open a new position, then you must have 2% of the size of that position available as margin. Another way of saying the same thing: for each dollar margin available you can make a 50 dollar trade.

OANDA Europe's Margin Requirements

OANDA fxTrade requires a specific margin to be available in your account for each currency pair you trade in. Below is the list of margin rates applicable for each currency pair.

See the OANDA Europe margin rates list.

What Happens with a Margin Closeout?

You must maintain sufficient margin in your account to support your open positions. You are responsible for monitoring your account to prevent margin closeouts.

A margin closeout will be triggered in the following circumstances:

When the Margin Closeout Value declines to half, or less than half, of the Margin Used. The fxTrade platform will try to alert customers who are signed in to the fxTrade platform when the Margin Closeout Value falls within 5% of a margin closeout, and again when the Margin Closeout Value falls within 2.5% of a margin closeout.

Please note: in a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the "Margin Closeout Percent" field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

See more detailed information on how to calculate margin.

If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains undermargined. Please see OANDA’s Hours of Operation for more information.

How to Avoid Margin Closeouts

Take proactive measures to avoid getting a margin closeout on your account. For example,

  • Monitor the status of your account continuously.
  • Use a lower leverage so you can impose a higher margin requirement on yourself. This way, you will not be tempted to enter into positions beyond your comfortable leverage level. You will also be aware of a potential margin closeout sooner, and be able to increase leverage as a last resort to head it off.
  • Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. (Click on an open trade in the "Trades" table, then click "Modify" in the pop-up window to change the stop-loss.)

Note: Your trade is closed at the current fxTrade rate, which may vary from your stop loss price -- especially when trading resumes after periods of market closure.

If you happen to be close to a margin closeout, the unique features of the fxTrade platform provide some simple strategies to avoid it:

  • Incrementally reduce the size of your positions as you get close to a margin closeout. (fxTrade allows you to trade in arbitrary units, as opposed to fixed lots, which makes this simple to do.)

For example, if you get a margin warning, reduce the size of all your open positions by 10%. This effectively lowers the amount of margin required, giving you more breathing room.

  • Close individual positions to reduce the amount of margin required.
  • If you are using a lower leverage, you can increase the leverage on your account as a last resort.
  • Transfer additional funds into your account. Note, however, that the time it takes to add funds could mean your funds arrive too late.

Asia Pacific

Avoid margin closeouts. Know about margin and how it works.

The OANDA fxTrade platform supports margin trading, which means you can enter into positions larger than your account balance. One advantage of margin-based trading is that you can strongly leverage the funds in your account and potentially generate large profits relative to the amount invested. The downside is that you can potentially incur significant losses in your margin capital very quickly. You may lose more than you invest.

What is Margin?

To ensure you can cover any losses you might incur on your positions, OANDA requires sufficient collateral. This collateral is typically referred to as margin. Although there is no minimum margin deposit required to open an fxTrade account with OANDA, the margin available in your account will limit the size of the positions you can open and will affect when you receive a margin alert and possible margin closeout. A margin closeout is the situation when the fxTrade platform automatically closes all of your open positions in the affected account, to significantly decrease the probability of losing more than the amount of collateral in your account.

The term leverage is often used to describe the margin requirements. A leverage of 50:1 corresponds to a margin requirement of 2% (1 divided by 50 is 0.02 or 2%). A 2% margin requirement means that, if you wish to open a new position, then you must have 2% of the size of that position available as margin. Another way of saying the same thing: for each dollar margin available you can make a 50 dollar trade.

OANDA Asia Pacific's Margin Requirements

OANDA fxTrade requires a specific margin to be available in your account for each currency pair you trade in. Below is the list of margin rates applicable for each currency pair.

See the OANDA Asia Pacific margin rates list.

How Margin is Calculated

When you have open trades for many different currency pairs, your account’s margin requirement is calculated by weighting the margin requirements for the various trades at their respective size and rates.

If this calculation is less than the margin requirement for the leverage set on your account, it takes precedence (if it is higher, then your default leverage is used).

For example, if you are trading pairs with a minimum 3% margin rate (or 33:1 leverage) and you’ve set your leverage at 10:1, the required margin will be 10% rather than the 3% minimum required by regulation.

See more detailed information on how to calculate margin.

What Happens with a Margin Closeout?

You must maintain sufficient margin in your account to support your open positions. You are responsible for monitoring your account to prevent margin closeouts.

A margin closeout will be triggered when the Margin Closeout Value declines to half, or less than half, of the Margin Used. The fxTrade platform will try to alert customers who are signed in to the fxTrade platform when the Margin Closeout Value falls within 5% of a margin closeout, and again when the Margin Closeout Value falls within 2.5% of a margin closeout. In addition, at 4 a.m. Singapore time each trading day, OANDA will send daily emails to accounts that fall below margin requirements for their aggregate open positions and are at risk of approaching a margin closeout.

Please note: in a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the "Margin Closeout Percent" field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains undermargined.

How to Avoid Margin Closeouts

Take proactive measures to avoid getting a margin closeout on your account. For example,

  • Monitor the status of your account continuously.
  • Use a lower leverage so you can impose a higher margin requirement on yourself. This way, you will not be tempted to enter into positions beyond your comfortable leverage level. You will also be aware of a potential margin closeout sooner, and be able to increase leverage as a last resort to head it off.
  • Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. (Click on an open trade in the "Trades" table, then click "Modify" in the pop-up window to change the stop-loss.)

Note: Your trade is closed at the current fxTrade rate, which may vary from your stop loss price -- especially when trading resumes after periods of market closure.

If you happen to be close to a margin closeout, the unique features of the fxTrade platform provide some simple strategies to avoid it:

  • Incrementally reduce the size of your positions as you get close to a margin closeout. (fxTrade allows you to trade in arbitrary units, as opposed to fixed lots, which makes this simple to do.)
  • Close individual positions to reduce the amount of margin required.
  • If you are using a lower leverage, you can increase the leverage on your account as a last resort.
  • Transfer additional funds into the account from another subaccount.
  • Add funds to the account. Note, however, that the time it takes to add funds could mean your funds arrive too late.


Nobody Profits from Margin Closeouts!

Some people erroneously believe that OANDA might benefit from a client getting a margin closeout. The truth is that OANDA does not benefit at all. Traders who lose money have less money to use for trading and may reduce their trading activity. As a company, OANDA benefits most when its customers are trading.

The bottom line is that each margin closeout harms a client and it harms OANDA. But it also protects clients from greater losses.


Australia

Avoid margin closeouts. Know about margin and how it works.

The OANDA fxTrade platform supports margin trading, which means you can enter into positions larger than your account balance. One advantage of margin-based trading is that you can strongly leverage the funds in your account and potentially generate large profits relative to the amount invested. The downside is that you can potentially incur significant losses in your margin capital very quickly. You may lose more than you invest.

What is Margin?

To ensure you can cover any losses you might incur on your positions, OANDA requires sufficient collateral. This collateral is typically referred to as margin. Although there is no minimum margin deposit required to open an fxTrade account with OANDA, the margin available in your account will limit the size of the positions you can open and will affect when you receive a margin alert and possible margin closeout. A margin closeout is the situation when the fxTrade platform automatically closes ALL of your open positions in the affected account, to significantly decrease the probability of losing more than the amount of collateral in your account.

The term leverage is often used to describe the margin requirements. A leverage of 50:1 corresponds to a margin requirement of 2% (1 divided by 50 is 0.02 or 2%). A 2% margin requirement means that, if you wish to open a new position, then you must have 2% of the size of that position available as margin. Another way of saying the same thing: for each dollar margin available you can make a 50 dollar trade.

OANDA offers a maximum leverage of 100:1, but we recommend clients cap their leverage at 20:1 or lower.

OANDA Australia's Margin Requirements

OANDA fxTrade requires a specific margin to be available in your account for each currency pair or CFD you trade in. Below you can find the list of margin rates applicable for each currency pair or CFD.

See the OANDA Australia margin rates list.

How Margin is Calculated

When you have open trades for many different currency pairs, your account’s margin requirement is calculated by weighting the margin requirements for the various trades at their respective size and rates.

If this calculation is less than the margin requirement for the leverage set on your account, it takes precedence (if it is higher, then your default leverage is used).

For example, if you are trading pairs with a minimum 3% margin rate (or 33:1 leverage) and you’ve set your leverage at 10:1, the required margin will be 10% rather than the 3% minimum required by regulation.

See more detailed information on how to calculate margin.

What Happens with a Margin Closeout?

You must maintain sufficient margin in your account to support your open positions. You are responsible for monitoring your account to prevent margin closeouts.

A margin closeout will be triggered when the Margin Closeout Value declines to half, or less than half, of the Margin Used. The fxTrade platform will try to alert customers who are signed in to the fxTrade platform when the Margin Closeout Value falls within 5% of a margin closeout, and again when the Margin Closeout Value falls within 2.5% of a margin closeout. 

Please note: in a fast moving market, there may be little time between warnings, or there may not be sufficient time to warn you at all. Be mindful of the “Margin Closeout Percent” field in the Account Summary of the fxTrade user interface. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout.

If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and the fxTrade platform will continue to monitor your margin requirements. When the markets reopen for the remaining open positions, another margin closeout may occur if your account remains undermargined. For more information, please see OANDA’s Hours of Operation.

How to Avoid Margin Closeouts

Take proactive measures to avoid getting a margin closeout on your account. For example,

  • Monitor the status of your account continuously.
  • Use a lower leverage so you can impose a higher margin requirement on yourself. This way, you will not be tempted to enter into positions beyond your comfortable leverage level. You will also be aware of a potential margin closeout sooner, and be able to increase leverage as a last resort to head it off.
  • Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. (Click on an open trade in the "Trades" table, then click "Modify" in the pop-up window to change the stop-loss.)

Note: Your trade is closed at the current fxTrade rate, which may vary from your stop loss price -- especially when trading resumes after periods of market closure.
If you happen to be close to a margin closeout, the unique features of the fxTrade platform provide some simple strategies to avoid it:

  • Incrementally reduce the size of your positions as you get close to a margin closeout. (fxTrade allows you to trade in arbitrary units, as opposed to fixed lots, which makes this simple to do.)
  • Close individual positions to reduce the amount of margin required.
  • If you are using a lower leverage, you can increase the leverage on your account as a last resort.
  • Transfer additional funds into the account from another subaccount.
  • Add funds to the account. Note, however, that the time it takes to add funds could mean your funds arrive too late.


Nobody Profits from Margin Closeouts!

Some people erroneously believe that OANDA might benefit from a client getting a margin closeout. The truth is that OANDA does not benefit at all. Traders who lose money have less money to use for trading and may reduce their trading activity. As a company, OANDA benefits most when its customers are trading.

The bottom line is that each margin closeout harms a client and it harms OANDA. But it also protects clients from greater losses.

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