Margin Requirements

Trades on the SWFX marketplace can be executed using leverage. Leverage allows you to open positions whose value exceeds the funds available in your account, increasing both potential profits and losses resulting from price movements. The maximum aggregate position size is determined by the account equity and the applicable leverage. The maximum leverage available for each trading instrument is shown in the table below.

Minimum margin requirements

To manage the risks associated with insufficient account equity, Dukascopy Europe applies the following minimum equity requirement:
The minimum equity required for a self-trading account is EUR 20. For accounts with a different base currency, the minimum equity is calculated as the equivalent of EUR 20 using the exchange rate applicable at the latest settlement. If the account equity falls below the minimum required level, Dukascopy Europe may close all open positions and block the account.

The minimum margin required to open a position depends on the leverage applicable to the trading instrument and current market prices.

Use of leverage

The Use of Leverage is an indicator showing how much of the available collateral is currently used by the exposure on the trading account. It is displayed as a percentage in real time and calculated as follows:

Example:

Margin call and margin cut policy

Margin call (use of leverage >100%) means a situation where the margin requirements do not allow the client to increase exposure on his account. The client may only close the existing unhedged positions or hedge current positions in order to reduce exposure. Despite the margin call level being reached, the positions will not be closed automatically. The automated system will cancel all placed bid/offer orders that can increase the exposure.

Margin cut or cut-off level (Use of Leverage ≥ 200%) - if the Use of Leverage reaches or exceeds 200%, Dukascopy Europe will close one or more of the client's open positions and cancel pending orders as necessary to reduce the account exposure and restore compliance with the applicable margin requirements.

Stock CFD Maximum Instrument Exposure

Maximum exposure per single stock CFD is 100,000 USD or equivalent in other currencies. Clients may request to increase maximum exposure to 250,000 USD, in this case leverage will be reduced to 1:2 from default setting of 1:5.

Maximum instrument exposure

Maximum net exposure of each currency pair on one trading account is limited to a position of 15 million of primary currency with an exception for HKD/JPY, USD/CNH and USD/MXN which max exposure is limited to 5 million of primary currency and EUR/PLN, TRY/JPY, USD/PLN, CAD/HKD, EUR/CZK, ER/DKK, EUR/HKD, EUR/HUF, EUR/TRY, USD/CZK, USD/DKK, USD/HKD, USD/HUF, USD/ILS, USD/RON, USD/THB and USD/TRY which max exposure is limited to 1 million of primary currency. For precious metals and CFD maximum net exposure is specified in the table below:

Clients may request to waive/increase the maximum exposure limit.

In this case the account leverage and leverage on particular instruments will be reduced.

Risk disclosure

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. It is highly recommended to maintain the use of leverage at normal levels. The client must always keep in mind that margin trading increases potential loss, as well as potential profit, and invested funds can quickly suffer losses in situations where the market prices exhibit strong volatility, potentially creating an adverse environment for the highly leveraged participant. The client shall be solely responsible for maintaining sufficient margin in relation to the existing positions.

If you have any questions about Dukascopy Europe services or require additional information, contact us by email at [email protected] or by phone send us a message,  +371 67 399 000 or alternatively ask for a call-back.