Margin requirements change on weekend and holidays

In this article we want to remind you that for positions opened from 22:00 (GMT+2) on Friday until 02:00 (GMT+2) on Monday, the maximum leverage is changed to 1:200. Margin requirements are also calculated according to these changes. The margin on these positions will be recalculated after the opening of the trading session, namely, after 02:00 (GMT+2) on Monday, based on the amount of funds in the client’s account and the leverage chosen by him earlier.

For you to understand how the margin is changing, we want to share a few examples below. Please, pay your attention to them.

Example 1. Opening and closing transactions during the period of IMR* (Increased Margin Requirements)

Let's suppose you use our Pro account, with a leverage of 1:1000, an account currency is USD.
Time Action Total margin on a trading account
Wednesday, 12:00 GMT+2 Opening the first order to buy USD/CAD, 1 lot size 100 USD
Friday, 23:00 GMT+2 Opening the second order to buy USD/CAD, 0.5 lot size 350 USD
Friday, 23:30 GMT+2 Closing the first order to buy USD/CAD, 1 lot size 250 USD

A trader opens an order before the onset of increased margin requirements and the margin on the account counts to 100 USD. Then the trader decides to open another order; however, IMR have come into force. It means that the margin for the second order is recalculated according to leverage of 1:200 and is 250 USD now, although under normal conditions the margin would be 50 USD. The total margin for the two orders is 350 USD. The trader closes the first transaction on Friday, 23:30 GMT+2 when IMR are still active. So the margin of 250 USD remains for an open order.

Note! The margin is recalculated only for those orders that are opened during the period of increased margin requirements. If the order was opened before IMR, the margin remains the same.

Example 2. Opening transactions during IMR and their closing after the period of IMR

Let`s take the same example with the Pro account, 1:1000 leverage, the account currency – USD.
Time Action Total margin on a trading account
Thursday, 12:00 GMT+2 Opening the first order to buy USD/CAD, 2 lot size 200 USD
Friday, 23:00 GMT+2 Opening the second order to buy USD/CAD, 1 lot size 700 USD
Monday, 11:00 GMT+2 Closing the second order to buy USD/CAD, 1 lot size 200 USD

The trader opens the first transaction before IMR come into force. Then he opens the second transaction during the IMR period. The margin for the second transaction is recalculated according to leverage of 1:200 and is 500 USD. The total margin is 700 USD now. After 02:00 (GMT+2) of Monday, the margin on the second order is recalculated according to the leverage of the trading account. The total margin is 300 USD now. The trader closes the second order, and the margin becomes 200 USD.

Please note that if you open a transaction during the period of IMR, but close it when margin requirements return to their previous value, the leverage and margin will be recalculated for this transaction!

Example 3. Opening a hedging position during the period of IMR

For example: Pro account, 1:1000 leverage, the account currency – USD.
Time Action Total margin on a trading account
Friday, 18:00 GMT+2 Opening the first order to buy USD/CAD, 1 lot size 100 USD
Friday, 23:30 GMT+2 Opening the second order to sell USD/CAD, 1 lot size 0 USD

The trader opens a position to buy the USD/CAD currency pair several hours before increased margin requirements come into action. The margin is calculated as usual. After IMR have entered into force, the trader decides to open the opposite transaction to sell USD/CAD. However, since the opening of the second order will lead to the hedging of the first order, and the margin for hedged positions is zero, the total margin on the trading account will be zero as well.

Note! The margin on hedged positions is 0 on all types of JustForex accounts.

Example 4. Partial hedging during IMR

For example: Pro account, 1:1000 leverage, the account currency – USD.
Time Action Total margin on a trading account
Tuesday, 16:00 GMT+2 Opening the first order to buy USD/CAD, 2 lot size 200 USD
Thursday, 13:00 GMT+2 Opening the second order to buy USD/CAD, 3 lot size 500 USD
Friday, 23:15 GMT+2 Opening the third order to sell USD/CAD, 4 lot size 100 USD

The trader opens the first order, and the margin is 200 USD. Then the trader opens a second order, the margin of which is 300 USD, and the total margin is 500 USD now.

The trader opens the third order when IMR are already active. The third order partially hedges positions opened earlier. Notice that orders that were opened closer in time to opposite orders are hedged first. Therefore, in this case, the second order and 1 lot of the first order are fully hedged. 1 lot to buy USD/CAD remains unhedged, and the total margin becomes 100 USD.

Example 5. Closing a hedged position during IMR

For example: Pro account, 1:1000 leverage, the account currency – USD.
Time Action Total margin on a trading account
Wednesday, 16:00 GMT+2 Opening the first order to buy USD/CAD, 1 lot size 100 USD
Thursday, 18:00 GMT+2 Opening the second order to buy USD/CAD, 2 lot size 300 USD
Friday, 17:00 GMT+2 Opening the third order to sell USD/CAD, 5 lot size 200 USD
Friday, 23:30 GMT+2 Closing the third order to sell USD/CAD, 5 lot size 2700 USD

After opening the first order, the margin on the account is 100 USD, after opening the second order, the total margin will increase to 300 USD (100 USD + 200 USD), and after opening the third order, which will lead to partial hedging of positions, the margin will decrease to 200 USD: 500 USD – (100 USD + 200 USD).

Then the trader decides to close the third order, which partially hedges positions on the trading account, while increased margin requirements are still in force. According to JustForex rules, the closing of such an order, in regards to the margin calculating, will be the same as the opening of a new transaction in terms of modified leverage and increased margin requirements.

Thus, closing the order of 5 lots to sell USD/CAD currency pair during the period of IMR corresponds to opening a new position in regards to the margin. The margin for 5 lots of USD/CAD with a leverage of 1:200 counts to 2500 USD. To the current value of the margin, 200 USD – the total margin for open transactions – is added. Therefore, the total margin for the trading account will be 2700 USD.

This margin will be distributed between open positions in proportion to their volumes: the first order will get ⅓ of the margin, the second – ⅔ of the margin. The margin for these orders will be 900 USD and 1800 USD, respectively, which one should consider when closing the first two positions.

If you still have questions or problems with margin calculating, please contact our support team.

* IMR – Increased Margin Requirements