Forex Margin Requirements
All assets in each currency are combined to determine a single net asset value in that currency. The margin for non-base currency assets is determined by taking the margin rate from the following table times the net asset value in the currency. There is no margin for base currency assets.
Leverage Rate Margin Requirement %* USD, EUR, JPY, CHF, GBP, AUD, CAD 50:1 2% HKD, SEK 30:1 3.33% MXN 20:1 5%The following are the margin requirements for each currency.
*Margin Requirement % = 1/Leverage Rate
Example
In the following example, assume the base currency for the account is USD and the net asset value positions (the sum of the values of all stock, cash, option, etc positions in each currency are as follows:
USD 50,000
EUR 30,000
CHF -39,000
MXN -100,000
1. Determine the net asset value (net liquidation value) for each currency. In this example, this is shown in columns 1 and 2 of the example table.
2. Convert all non-base currency positions to base currency using prevailing market rates between the asset currency and base currency, here, USD. (column 3). This result is shown in column 4.
3. Apply the margin rate for each currency (column 5).
4. Calculate the margin in base currency as the net asset value from each original currency converted to USD multiplied by the margin for that currency (column 4 times column 5). The result is shown in column 6.
5. The total margin requirement is the sum of each currency sourced margin requirement. In our example, the total margin requirement in base currency, USD, is $2,722.38. As the total net liquidating value expressed in USD is $46,476.19, the excess liquidity is the difference, $44,203.81. 