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April 5, 2016

Question:How to calculate margins & exposures on FXnet Trader platform?

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Answer:

As iForex has set to all real/live accounts, stop out triggers when there is no positive balance in an account, and it will liquidate(close) all the positions in the account.

Margin level is one important % you need to monitor at all times while trading.

Used margin

Used Margin displayed in the FXnet Trader simply shows the balance of the margin you are using to support your open positions in the account.

It is calculated as follows:

Used Margin = Net Exposure/Leverage

As iForex does not notify clients with message, there is no margin call. You can use full margins for opening positions in your account.

Margin Available

Margin Available is the balance you have left in your account which is available for support further open positions.

It is calculated as follows:

Margin Available = Equity – Used Margin

If the Margin Available is zero, that means that you are using full margin to support existing open positions, and you can not open extra positions in that case.

Margin Utilization

Margin Utilization in FXnet Trader indicates the % of the used margin in your account.

It is calculated as follows:

Margin Utilization % = (Used Margin/Equity) x 100

If the Margin Utilization is 100%, that means that you are using full margin to support your current open positions.

You can not open another new positions in that case.

Exposure Coverage

Exposure Coverage in FXnet trader indicates the % of the net exposure is held in your account to support existing open positions.

It is calculated as follows:

Exposure Coverage = Equity/Net Exposure

No margin calls in iForex

iForex does not have margin calls to notify traders when the margin level is low.

But iForex allows traders to use full margin for trading, and Stop out occurs only when there is no positive balance in your account.

So if there is no positive free balance in your account, iForex system will close all the positions immediately to avoid further losses.

NBP(Negative Balance Protection) for all traders

iForex implements NBP, Negative Balance Protection policy to all its traders’ accounts.

So after the stop out triggers and the account balance goes negative as a result, iForex will fix the balance to Zero so traders do not need to cover the exceeded losses at anytime.

The exceeded losses are covered by iForex itself.

Increased Margins around weekends

You need to careful that when the market closes, weekends or holidays, iForex may increase the required margin for new positions.

The increased margin will be applied from 2 hours before a weekend or holiday, to 15 minutes after the market open.

Around these time, iForex will require double the normal margin.

The usage of margin does not affect accounts to reach stop out level directly though, still you may want to go through and understand the conditions of trading by iForex.

You can find the full trading conditions in the contract specifications provided by iForex in its official website.

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