Forex Margin Trading

Margin can be thought of as a good faith deposit to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. At Friedberg Direct, margin requirements are derived from rates published by CIRO. See https://www.ciro.ca/.

Trading on Margin (Trading with Leverage*) is a common attraction of the forex market. It allows you to open trades that are larger than the capital in your account. Trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified.

In Canada, the Investment Industry Regulatory Organization of Canada (CIRO) is the national self-regulatory organization that set the margin requirements needed, which may be changed at any time without notice. The calculation of the margin requirements is dependent on the currency pair of choice, as well as the currency that the account is denominated in. For more information see https://www.ciro.ca/

Initial Margin:

This is the amount required to open a new position.

Maintenance Margin:

This is the minimum amount required to maintain your open positions.If your account equity falls below the Maintenance Margin level (Usbl Maint Mr = 0), a Maintenance Margin Warning will be issued. At that point, you will no longer be able to place new trades.You will have approximately five calendar days from 17:00 ET on the day the Margin Warning is triggered to bring your account equity back above the Maintenance Margin level. You can do this by either:

• Adding additional funds to your account, or
• Closing existing positions.

Note: Weekends and bank holidays count toward the five-day period. Liquidation occurs at the end of the fifth day if the margin requirement has not been met.

Liquidation Margin:

The Liquidation Margin is typically 10% of the Initial/Maintenance Margin.If your account equity reaches the Liquidation Margin level, all open positions will be immediately liquidated, even if you are still within the five-day grace period of a Maintenance Margin Warning.

See Current USD Margin Requirements per 10K Lot

See Current CAD Margin Requirements per 10K Lot

See Current CFD Margin Requirements

For every instrument traded on the Trading Station platform, Initial/Maintenance Margin Requirement denoted as [MMR] is displayed in the [MMR] column of the Simple Dealing Rates window.

• [Equity] Floating value of funds in the account, including both realized and unrealized P/L on open positions.
• [Usd Mr] – Used Margin Represents the Liquidation Margin Level, equal to 10% of the Used Maintenance Margin.
• [Usbl Mr] – Usable Margin Funds available above the liquidation level. All positions are liquidated when this reaches zero.
• [Usbl Mr %] = (Usbl Mr ÷ Equity) × 100%. A Maintenance Margin Warning is triggered at 90%; liquidation occurs at zero.
• [Usd Maint Mr] – Used Maintenance Margin. Margin required to maintain existing positions.
• [Usbl Maint Mr] – Usable Maintenance Margin. Margin available to open new positions. A Maintenance Margin Warning is triggered when this reaches zero.
• [Usbl Maint Mr %] = (Usbl Maint Mr ÷ Equity) × 100%.
• [MC] – Margin Call Status
• N – Sufficient Maintenance Margin
• W– Maintenance Margin Warning issued
• Y – Positions liquidated due to insufficient margin

Example: Margin Warning and Liquidation Threshold

In the Simple Dealing Rates window of this Canadian-denominated account, the EUR/USD MMR is shown as 500.Current Maintenance Margin levels can be viewed directly in the Simple Dealing Rates window of Trading Station II.

Scenario Setup

• Account Equity: CAD 5,000
• Position: Long 10K EUR/USD
• Initial Margin Requirement: CAD 500
• Liquidation Margin: CAD 50

1. Opening the Position

After opening the 10K EUR/USD position, you have CAD 4,500 in Usable Maintenance Margin, which is enough to open another 10K position if desired.MC = N (No Margin Call or Warning).

2. Equity Falls to CAD 800

Usable Maintenance Margin is now CAD 300, which isn't sufficient to open another 10K position.MC = N (No Margin Call or Warning).

3. Equity Falls to CAD 500 (Margin Warning)

When Usable Maintenance Margin % reaches 0% (or Usable Margin % reaches 90%), a Margin Warning is triggered and "W" will appear in the MC column.

• From this point, you have approximately five calendar days from 17:00 ET on the day of the warning to restore your account equity above the Maintenance Margin level (Usbl Maint Mr).
• This can be done by depositing additional funds or closing positions.
• If your equity falls further to the Liquidation Margin Level (CAD 50 / Usbl Mr = 0), your positions will be immediately liquidated, and the five-day grace period no longer applies.
• Weekends and bank holidays count toward the five-day period.

4. Equity Falls to CAD 50 (Liquidation)

If your equity continues to drop and Usable Margin (Usbl Mr) and Usable Margin % (Usbl Mr%) reach zero, all open positions are liquidated.MC = Y (Liquidation Triggered).

Once a Margin Warning is triggered, there are five possible scenarios:

Scenario 1: You deposit additional funds

If, within five calendar days, you deposit enough funds to bring your equity back above the Used Maintenance Margin requirement, the Margin Warning will automatically reset in real time.MC column will display "N" (No Margin Call).

Scenario 2: You close positions

If, within five calendar days, you close out positions and your equity rises above the Used Maintenance Margin requirement, the Margin Warning will also reset automatically in real time.MC column will display "N".

Scenario 3: The market moves in your favor

If favorable price movements bring your equity back above the Used Maintenance Margin requirement, the Margin Warning will reset at the daily margin check at 17:00 ET.You may also contact Friedberg Direct. to request an earlier reset.MC column will display "N".

Scenario 4: You take no action

If, after five trading days, your equity remains below the Used Maintenance Margin requirement, your positions will be liquidated at approximately 18:00 ET on the fifth day.MC column will display "Y" (Liquidation).

Scenario 5: Equity falls to the Liquidation Margin Level

If at any time your Usable Margin [Usbl Mr] reaches zero, your positions will be immediately liquidated, regardless of how many days remain in the grace period.MC column will display "Y".

If at any time your Usable Margin [Usbl Mr] reaches zero, your positions will be immediately liquidated, regardless of how many days remain in the grace period.MC column will display "Y".

Email Notifications

As a courtesy, you will receive an email when your Usable Maintenance Margin % reaches 0% and your account enters Margin Warning status.However, you should not rely solely on email notifications, as delivery may be affected by spam filters, email changes, or other issues. It remains your responsibility to monitor your account, positions, and margin levels at all times.

Accounts will be triggered for liquidation at 18:00 ET on the fifth day following the issuance of a Margin Warning, unless your positions reach the Liquidation Margin Level earlier.Please note that weekends and bank holidays count toward the five-day period allotted to bring your account equity back above the Maintenance Margin Requirement.If the fifth day falls on a Saturday, open positions will be liquidated at market open on Sunday at approximately 18:00 ET.

Liquidation table

You can either close out existing positions to free up equity or deposit additional funds to bring your account equity back above the Maintenance Margin Requirement (Usd Maint Mr). Friedberg Direct processes most credit card deposits instantly, although in some cases they may take up to 24 hours to appear.

There is a daily maintenance margin check at 17:00 ET. If the market has moved in your favor and your Usable Maintenance Margin (Usbl Maint Mr) is greater than 0 at that time, your Margin Status will be reset (MC = N). You may also contact Friedberg Direct if you wish to have your margin reset earlier. Contact Friedberg Direct.