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What is FX Margin Trade? | Rakuten Securities HK

In FX Margin trade, leverage of 20:1 allows you to trade with $1,000 in the market by setting aside only $50 as a security deposit. This means that you can take advantage of even the smallest movements in currencies by trading with more money in the market than you have in your account.

Basic concept of FX margin in forex trade market

FX Margin is one of the major concepts of Forex trade. It is a deposit made in good faith by a trader as security or collateral to start a trade. Fundamentally, it is the least amount that a trader requires in the trading account in order to open a new position. This is usually calculated as a percentage of the notional value of the trade. The difference between the deposit amount and the full value of the trade is loaned out by the broker.

Before moving further, let’s also touch the concept of leverage. Leverage and margin are closely linked because the margin would be, lesser the leverage a trader would be able to use as the trader would have to bring more of his own money (margin) into the trade and thus, borrow less from the broker.

Although, FX margin trade is a very important part of the Forex trading, a lot of people don't understand the importance of FX margin trade. A Forex margin is required to maintain open positions in trade. A margin is not a charge or a transaction cost. Instead, it is a part of your account equity, which is put aside and allotted as an FX margin deposit.

Forex margin trade can have a variety of outcomes. It can affect your trading involvement, both positively and negatively. Both profits and losses can occur in large amounts. Your broker uses your margin deposit to group it with someone else's FX margin deposits. This enables brokers to place trades inside the interbank system. A margin is often estimated as a percentage of the complete amount of the chosen position.

FX Margin Trade

Trading forex on margin allows the traders to increase the size of their position. Margin enables traders to open trading positions with leverage, providing them with more exposure to the FX markets with a smaller starting capital. However, margin can also be a double-edged sword as it amplifies both profits and losses since it is based on the complete value of the trade instead of just the amount essential to open it.

Rakuten Securities HK and FX Margin Trade

Rakuten Securities HK provides leveraged currency trading with a 5% per lot of leverage level. 20:1 leveraging is the maximum limit allowed by the SFC regulations. Necessities for leverage can vary from time to time at the sole discretion and ability of Rakuten Securities HK, depending on the volume of the trade and market conditions. They offer:

Minimum Initial Margin Level – 5%

If you want to open a new position, your existing account equity must be more than the first margin level requirement. Rakuten Securities HK’s initial margin level requirement is 5% of the complete open positions value.v

Minimum Maintenance Margin Level – 3%

When your available equity of an account starts to go beneath the maintenance margin level requirements, Rakuten Securities HK is legally allowed to close open positions until the account equity moves above the position maintenance margin level requirement. As of now, Rakuten Securities offers the maintenance margin level requirement at 3% of open positions value.

Minimum Liquidation Margin Level – 2%

When the equity of your account starts to go under the minimum liquidation margin level requirement, Rakuten Securities HK will be automatically able to close all open positions in your account. The minimum liquidation margin level is two percent (2%) of open positions value.


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Margin

FOREX TRADING MARGINS

Rakuten Securities HK offers leveraged* currency trading with the leverage level at 5% per lot (20:1 leveraging, the maximum allowed by the SFC regulations).

 

Requirements for leverage may be changed from time to time at the sole discretion of Rakuten Securities HK, based on volume traded and market conditions.

 

  • Minimum Initial Margin Level – 5%
    In order to open a new position, available account equity must exceed initial margin level requirement. The initial margin level requirement is 5% of open positions value.

 

  • Minimum Maintenance Margin Level – 3%
    When the equity of an account falls below the maintenance margin level requirements, Rakuten Securities HK has the right at its discretion to close open positions until account equity exceeds the maintenance margin level requirement. The maintenance margin level requirement is 3% of open positions value.

 

  • Minimum Liquidation Margin Level – 2%
    When the equity of an account falls below the liquidation margin level requirement, Rakuten Securities HK will automatically close all open positions in the account. The liquidation margin level is 2% of open positions value.

 

 

 

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Although demo accounts attempt to replicate real-time market scenarios, they are based on simulated market environment. As such, there are key differences that distinguish it from a live account; including but not limited to, the lack of dependence on real-time market liquidity, delay or difference in pricing and spread. The operational capabilities when executing orders in a demo environment may result in atypically expedited transactions, lack of rejected orders, and/or the absence of slippage. Additionally, updates to demo account may not coincide with those of live accounts.

^ Rakuten Securities was ranked as the world’s fifth largest retail forex broker by volume in August 2017 from Finance Magnates.
Ŧ Only available for clients who hold a Rakuten FX account.
¤ Fixed spreads are offered in Rakuten FX account during at least 95% of the time of the monthly core-time trading period (8am to 2am HKT of every trading day). Spreads shown above and in our website are for reference only and are not guaranteed and may widen beyond the average spreads depending on the market volatility, especially under circumstances of extremely low liquidity, news events or public holidays. Please always refer to the trading platforms for the most updated spreads.
ɞ Order execution rate is calculated based on the AS Streaming and Streaming trading orders in 10k or less order size with lower than 1 pip slippage setting in which were executed during the period between Jan 1 to Nov 1, 2017.
§ Rakuten Securities HK offers Trading Station platform through its partner FXCM.
Commission is charged per trade side on both open trade(s) and close trade(s). All commission fees may be subject to change from time to time without prior notice. Please always refer to the most updated Schedule of Standard Fees and Charges.
ʊ MARKETSPEED FX platform is the winner of “Online Forex Trading Platform” by Good Design Award in 2012.

To safeguard your trading account(s), you are highly recommended to set a strong password and change it regularly.

When executing customers’ trades, Rakuten Securities HK can be compensated in several ways, which include, but are not limited to: charging fixed lot-based commissions at the open and close of a trade, adding a markup to the spreads, acting as a counterparty in the transactions. As a result, Rakuten Securities HK’s interests may be in conflict with yours.

Rakuten Securities Hong Kong Limited (“Rakuten Securities HK” SFC CE Number: AIM232) is a wholly owned subsidiary of Rakuten Securities, Inc. (*) Rakuten Securities, Inc., one of the major online brokers in Japan, founded in 1999, is a subsidiary of Rakuten, Inc. (TOKYO: 4755).
The risk of loss in leveraged foreign exchange trading can be substantial. You may not be suitable as you may sustain losses in excess of your initial margin funds. Leverage can work against you. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives. Do not speculate with capital that you cannot afford to lose. If you decide to trade products offered by Rakuten Securities HK, you must read and understand the information and disclosure provided by Rakuten Securities HK. Rakuten Securities HK may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. Rakuten Securities HK and Rakuten Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on Rakuten Securities HK’s website prior to taking further action.
Information Security on Internet: To protect your privacy, do not access your trading account via public or shared computer or save your password locally in any computer or mobile device after logging in. Rakuten Securities HK will never ask you to send any of your personal information such as account number and password to us directly via e-mails.
(*)Company Registration ID (in Japan): Kanto Local Finance Bureau (Financial Instruments Firms) No.195