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FOREX Margin Trading

Trading with Leverage

Forex is traded on margin. This means that you can leverage your investment by opening positions of larger size than the funds you have available to place as collateral. Margin means the amount of funds (i.e. cash provided to Galt & Taggart) reserved on your trading account to cover any potential losses from open FX (or other margined products) positions.

Margin requirements differ by currency pair and depend on the exposure in the currency pair. Margin requirements may be subject to regulatory mandated minimums, and may be subject to change according to the underlying liquidity and volatility of the currency pair. For this reason, the most liquid currency pairs (the majors) in most cases require a lower margin requirement.

Tiered Margin Methodology

Galt & Taggart offers tiered margin methodology as a mechanism to manage political and economic events that may lead to the market becoming volatile and changing rapidly. With tiered margin, the average margin requirement ("Blended Margin Requirement") increases with the level of exposure. The opposite is also true; as the level of exposure decreases the margin requirement also decreases. This concept is illustrated below:

The different levels of exposure (or tiers) are defined as an absolute number of U.S. Dollars (USD) across all currency pairs. Each currency pair has a specific margin requirement in each tier. Margin requirements by instruments can be viewed in the G&T Trader platform, under Trading Conditions.

Please note that margin requirements may be changed without prior notice. Galt & Taggart reserves the right to increase margin requirements for large position sizes, including client portfolios considered to be of high risk.

Initial and Maintenance Margin

Initial margin and maintenance margin are designed to protect you against adverse market conditions, by creating a buffer between your trading capacity and margin close-out level.

  1. Initial margin: a pre-trade margin check on order placement, i.e. on opening a new position there must be sufficient margin collateral available on account to meet the initial margin requirement for the entire margin portfolio.
  2. Maintenance margin: a continuous margin check, i.e. the minimum amount of cash or approved margin collateral that must be maintained on account to hold an open position(s). Maintenance margin is used to calculate the margin utilisation, and a close-out will occur as soon as you do not meet the maintenance margin requirement.

Margin requirements by instruments can be viewed in the G&T Trader platform, under Trading Conditions.

Risk Warning

Margin Trading carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors.
Ensure you fully understand the risks involved and seek independent advice if necessary.

See our Risk Warning.

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1

Open an Account

Request an account opening online via our website.

2

Fund

Add funds quickly and securely via bank transfers.

3

Trade

Access 35,000+ instruments across all asset classes.