Understanding Dynamic Margin Requirement

Trading is risky. Your capital is at risk.

The Dynamic Margin Requirement is a mechanism implemented to manage market volatility during key events and specific periods, such as economic announcements, weekends, and public holidays. Dynamic Margin Requirement ensures that higher margin requirements are applied to mitigate clients' exposure and maintain market stability.

Before diving into the intricacies of Dynamic Margin Requirements, it's essential to have a solid understanding of how Margin Requirements are calculated. If you're not yet familiar with how floating leverage works or how to calculate margin required, we strongly recommend reviewing our article on Floating Leverage Calculation. It provides the necessary context and formulas that will help you better grasp the dynamic mechanisms discussed here.

Dynamic Margin Requirements apply to all asset classes, including Forex, metals, indices, commodities, crypto, and shares. The duration of the Dynamic Margin Requirement period depends on the event type. For instance:

News Releases: 12 minutes before the release of major economic news and ends 2 minutes after the news is released.
Weekends/Public Holidays:before market close on Friday (or on Thursday if Friday is a market holiday), resetting upon market open.

During that period, the maximum leverage for opening new positions on all instrument groups is reduced to 1:200.

Examples of scenarios where the dynamic margin is applied

During the significant economic announcements, such as Non-Farm Payrolls (NFP), Dynamic Margin Requirement is applied to orders placed shortly before and after the release. After the event, the margin is recalculated based on the account's equity and leverage.

An NFP release is scheduled for 13:30 UTC.
A trade of 2 lots on EURUSD with maximum leverage of 3000 is opened at 13:21 UTC.
Dynamic Margin Requirement applies leverage of 1:200 during the event window (13:20–13:32 UTC).
Margin required increases from 66.67 EUR to 1,000 EUR
Weekends and Public Holidays

Ahead of weekends and market holidays ,Dynamic Margin Requirement applies higher margin requirements to mitigate risks from extended market closures.

A trade of 10 lots on UK100 is opened at 23:30 server time Friday.
With Dynamic Margin Requirement leverage of 1:200 during the pre-closure window (22:55–23:55), the margin required increases from 166 GBP to 415 GBP

Have more questions?

Call us at: +44 2045 771951

Engage with our chatbot