Margin and leverage

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Margin and leverage

Flexible leverage of 1:1-1:100 

Negative balance protection

Real-time risk disclosure monitoring

Margin won’t change at nighttime or weekends

In SVOFX, clients use the same margin requirements, maintain the flexibility of transaction through flexible application of the leverage from 1:1 to 1:200。 

Margin

Margin means the guarantee amount to cover the credit risk incurred in trade business.
Margin is defined by the ratio (5% and 1%, etc.) of position scale. The only justifiable reason of existing fund in trade account is to ensure sufficient margin. For example, if the margin is 1%, the position of USD 1,000,000 shall need deposit of USD 10,000.
As long as the transaction account is not fully hedged due to new transaction, in order to open for new transaction, the margin in transaction account must exceed 100%.

Dynamic Margin Rate

In SVOFX, dynamic leverage can be used to adapt to automatically used margin and transaction volume of various financial commodities. Meaning that if the trading volume of each 1 commodity increases, based on the dynamic leverage value of various commodities, the margin rate would also increase.

Leverage

Using leverage means that you can make transaction in the position higher than the amount in your transaction account. The leverage amount is indicated with ratio. For example, 1:50, 1:100, or 1:200. Assuming your transaction account has USD 1,000, you have a transaction with scale of 200,000 USD/JPY, then your leverage equals 100:1.

How you can make a transaction equivalent to the scale 500 times of your disposable amount? In SVO, when you have margin transaction, there is always free short-term credit allowance at any time. This makes your purchase of transaction amount more than your account value possible. If there is no such allowance, you may only have the transaction with the scale of USD1,000 at a time.

Flexible Application of SVOFX

Based on the type of account opened at SVO, leverage can be chosen in the range from 1:1 to 1:100. The margin is required to remain unchanged at usual times and remain unchanged during nighttime and weekends. Besides, in SVO, you may require increase or decrease of already chosen leverage.

Flexible Application of risk

On one hand, by using leverage, even a relatively small scale of original investment can obtain considerable return. On the other hand, when you don’t apply to proper risk management, you may also suffer great loss.

This is why SVOFX provides leverage range, to help you choose your favorite risk level.

Margin Monitoring

SVOFX can implement real-time risk disclosure management by monitoring the already used margin and free margin.

The already used margin and free margin jointly constitute your capital. The already used margin means the amount to be deposited for the need of transaction (for example, when the account has set the leverage of 100:1, the margin that must be deposit equals 1% of the transaction scale). Free margin means the residual amount in your trade account, it will change based on the equity of your account. You may use it to open and add position, or you may absorb loss.

Margin Call

Each client side is responsible for monitoring the activities of each transaction account, SVOFX ensures the maximal risk not to exceed the account’s own capital based on its margin call strategy.

If your account’s equity falls below our specified percentage of the margin required to maintain an open position, you will be immediately notified by a margin call, warning you that there is not enough equity to support your open position.

Stop Out Level

The stopout level means the equity level when the open position is self-trimming.