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Margin Policy

Since December 20, 2007 the minimum margin requirement offered by TLVD Financial Group is 1%. Under the percentage based margin, the required margin is a percentage of the numerical value of the base currency, i.e. the first currency in a pair. For example, for the USD/CAD the base currency is USD whereas for the EUR/USD pair the base currency is Euro.

1. For USD based currency pairs the minimum margin requirement is equal to $1000 per unit.

Example:

1 unit USD/JPY 1 unit USD/CHF 1 unit USD/CAD
1% from $100,000 = $1,000 1% from $100,000 = $1,000 1% from $100,000 = $1,000

2. For non-USD based currency pairs the minimum margin requirement is equal to 1% * 100,000 base currency * prevailing market rate.

Example:

1 unit EUR/USD 1 unit GBP/USD 1 unit AUD/JPY
1% x 100,000 EUR x 1.4390 = $1,439* 1% x 100,000 GBP x 2.0210 = $2,021** 1% x 100,000 AUD x 0.8575= $857.5***

* Calculated at the market rate of 1.4390 at the time of conversion.
** Calculated at the market rate of 2.0210 at the time of conversion.
*** Calculated at the market rate of 0.8575 at the time of conversion.

3. Customers can require margin greater than 1%, e.g. 2% or 3%, and follow the example of the 1% margin requirement calculation to find out the margin value amount.

Example:

1 unit USD/JPY 1 unit USD/CHF 1 unit USD/CAD
2% from $100,000 = $2,000 2% from $100,000 = $2,000 2% from $100,000 = $2,000

Example:

1 unit EUR/USD 1 unit GBP/USD 1 unit AUD/JPY
2% x 100,000 EUR x 1.4390 = $2,878* 2% x 100,000 GBP x 2.0210 = $4,042** 2% x 100,000 AUD x 0.8575= $1,715***

* Calculated at the market rate of 1.4390 at the time of conversion.
** Calculated at the market rate of 2.0210 at the time of conversion.
*** Calculated at the market rate of 0.8575 at the time of conversion.

4. Customers can still trade fractional units and the margin will be adjusted accordingly:

Example:

0.1 unit USD/JPY 0.1 unit USD/CHF 0.1 unit USD/CAD
1% from $100,000 × 0.1 = $100 1% from $100,000 × 0.1 = $100 1% from $100,000 × 0.1 = $100

Example:

0.1 unit EUR/USD 0.1 unit GBP/USD 0.1 unit AUD/JPY
1% x 100,000 EUR x 1.4390 × 0.1 = $143.9* 1% x 100,000 GBP x 2.0210 × 0.1 = $202.1** 1% x 100,000 AUD x 0.8575 × 0.1 = $85.8***

* Calculated at the market rate of 1.4390 at the time of conversion.
** Calculated at the market rate of 2.0210 at the time of conversion.
*** Calculated at the market rate of 0.8575 at the time of conversion.

5. Any account with 1% margin and long the higher interest rate currency in the pair will be able to earn rollover fees.

Customers should be aware of two additional important changes:

  1. Margins will be expressed as a percentage of the unit size of a currency pair rather than being calculated as a function of a fixed dollar amount. For example, previously a customer trading 2 units of GBP/USD on a $1,000/unit would need to maintain $2,000 (2 x $1,000) to keep the trade open; whereas after the margin change the customer would require $4,042.00***** (200,000 GBP x 1% x 2.0210) to keep the same trade open.
  2. The usable margin for cross pairs, e.g. EUR/JPY and AUD/JPY, will be affected not only by the cross price but also by movements in EUR and AUD against USD. For instance, even if a cross price is moving in the customer’s favour, the usable margin could still be negatively affected if the Dollar falls against the Euro or the Australian Dollar.

**** Calculated at the market rate of 2.0210 at the time of conversion.

If you have any questions about this margin change or if you need help in calculating your margin, please call us or email us.

It is the customer’s responsibility to monitor and maintain the margin account balances. TLVD Financial Group reserves the right to adjust the per-unit margin requirement at any time. The customers will be informed of margin changes via a trading platform. Customers should take all the necessary precautions to prevent a margin call. When an account balance is no longer able to cover the minimum margin requirement, all the positions will be closed automatically. It is important to know that a report on the status of the account with each change of the rate tracks the margin requirements on the sufficiency of funds in the account for open positions. Customers are advised to check their margin status.