Margin Requirements

dbFX is a margin trading platform, allowing you to control a large foreign exchange position with a relatively modest-sized account.

Trading on margin allows you to greatly leverage your capital and potentially generate strong profits relative to the amount invested. Also, you do not need to lock up a large amount of funds which could be put to work in other areas.

However, margin trading also carries a high degree of risk. A small market movement can result in a substantial loss of funds. Since high leverage imposes this risk, there are features embedded in the dbFX trading platform that can help reduce the amount you can lose in trading. The dbFX Trading Platform automatically calculates margin requirements, and checks available funds before you can enter a new position. If the account equity, the total floating value to market, as described below ever falls below the minimum margin requirement a Margin Call will be issued and all positions will be automatically closed.

What are the margin requirements for dbFX?

You are eligible to select the margin level applicable to your account, down to a minimum margin level of 1% or 2% (or a maximum leverage of 100:1 or 50:1) according to your trading experience. This equates to a minimum margin of $1,000 or $2,000 for each lot, which represents 100,000 units of the first or "base" currency being traded.

How do I change my maximum margin?

You can request that your leverage be changed by simply logging into the "Manage your profile" page and clicking on "Change Margin" within the forms section.

If you were assigned a minimum 2% margin during the online application process and would like to increase your leverage, a margin requirement of 1% will be considered if your circumstances satisfy our criteria.

How can I monitor my margin?

There are four measures that you can use to track your margin levels. Each is continuously updated in real-time by the dbFX Trading Station.

• Account Balance: The value of account funds without taking into consideration profits or losses on open trades (or "positions").
• Account Equity: The "floating" value of account funds after taking into account all profits or losses in open trades. If you were to shut down all open trades, this value would be locked in and become the Account Balance.
• Used Margin: The amount of account equity currently committed to maintain open trades (i.e. your deposit on the trade). The account must maintain at least this amount to support open positions.
• Usable Margin: The account equity not currently committed to maintain open trades. It is available either to open a new trade or to act as a "cushion" against a margin close-out, i.e. it represents the amount that existing trades can move against you before receiving a margin close-out.

What are the margin requirements for different types of orders?

Each order type has specific logic regarding the usage of margin to open and close positions.

• Market Orders: Market orders create new positions and you will need the full margin requirement in your "Usable Margin".
• Orders linked to an Open Position: Once a position is open, an order can be linked to that position, such as a stop or limit order. This linked order does not require additional new margin. As this order is offsetting your position, it will reduce your "used margin" when executed. Linked orders must be for the full amount of the original position.
• Stop or Limit Orders, Entry Orders: New orders to enter positions, such as a stop entry or limit entry, require new "usable margin" to open the position. If you do not have sufficient margin at the time the order is placed, the order will not be accepted. If your "usable margin" falls below the amount required to execute the order, on an existing stop entry or stop limit, the new order will be cancelled.

Margin Calculations

Click here for an example margin calculation.