Saxo Markets Australia changes margin methodology for all CFD and FX products
Saxo Markets Australia, part of leading online trading and investment specialist Saxo Group, is introducing new minimum initial and maintenance margin calculations for all CFD and FX products.
The changes to the margin methodology have already come into effect – in fact, they were implemented on March 17, 2021 at 9am AEDT. The aim of the reform is to better protect traders against adverse market conditions, and in order to comply with ASIC’s Product Intervention Power Order. The new initial and maintenance margin framework for CFDs and FX will create a buffer between clients’ trading capacity and the margin close-out level.
This means clients’ margin requirements will now consist of two elements:
- The Initial margin: the amount of margin required to open a new position
- The Maintenance margin: the amount of margin required to maintain an open position.
If you are holding both a long and short position in the same instrument that will not net at end-of-day, the margin will now be calculated on the largest leg. At the same time interest margin for FX forward trades will no longer be charged. Additionally, intraday margin on CFDs will no longer be available.
There are new margin close-out levels for Retail Clients, effective March 17, 2021. If your maintenance margin utilisation reaches or exceeds 100%, your margin positions will automatically be closed out , and any open orders on margin products will be automatically cancelled.
From 9:00 AM AEDT, 17 March 2021, the margin ceiling is a restriction (or limit) on opening new exposure that would bring the total portfolio initial margin requirement above AUD 800,000 to prevent from opening new exposure but will be able to maintain the existing position(s) as long as margin utilization remains below 100%.
On a related note, Wholesale clients are able to trade with higher leverage than Retail clients and may also have access to other benefits.
Effective from 29 March 2021, several changes will apply to how Australian retail clients trade CFDs, per ASIC’s Product Intervention Order. Saxo promises that the impact on CFD trading conditions will be limited due to the responsible leverage levels it already offer on its CFD products.