ThinkMarkets announced on Tuesday that the broker is increasing the margin requirement of several contracts for differences (CFDs) instruments due to ‘unprecedented’ volatility in the global equities market, causing a liquidity crunch.
“Due to unprecedented volatility and low levels of liquidity in the global equity markets, ThinkMarkets is increasing the margin requirements on a selection of CFD equity products across our MT4, MT5 and ThinkTrader platforms,” the broker noted.
In addition, it highlighted that the margin changes for some of the products were significant and urged traders to make sure that their accounts are ‘capitalized well enough to avoid a margin call’.
The changes in the
margin requirements
Margin Requirements
A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities present in a margin account. While 25% is the minimum industry requirement, trading brokerages sometimes require between 30% to 40% of the total securities value as a margin requirement as a way to reduce the risk of an investor potentially defaulting on the loan. Why Are Margin Requirements Important?Ex:) A trader possesses a margin account equity sum of $5,000, which means the trader must maintain at least $1,250 in their margin account. Should the trader’s equity appreciate up to $7,500, then the trader’s margin requirements increase from $1,250 to $1,875. However, should a trader’s equity account fall below margin requirements set forth by a broker, that trader will receive what is known as a margin call, which is a request to deposit more or sell of pre-existing assets to fulfill margin requirements. Margin requirements exist and are heavily regulated by the FINRA, NYSE, and the Federal Reserve Board due to the potential of margin trading able to incur astronomical gains along with immense losses. Disturbances in the securities and global financial market are possible as a result of catastrophic losses through margin trading.This is why margin trading is firmly regulated and the reason behind some brokerages raising their minimum margin requirements.
A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities present in a margin account. While 25% is the minimum industry requirement, trading brokerages sometimes require between 30% to 40% of the total securities value as a margin requirement as a way to reduce the risk of an investor potentially defaulting on the loan. Why Are Margin Requirements Important?Ex:) A trader possesses a margin account equity sum of $5,000, which means the trader must maintain at least $1,250 in their margin account. Should the trader’s equity appreciate up to $7,500, then the trader’s margin requirements increase from $1,250 to $1,875. However, should a trader’s equity account fall below margin requirements set forth by a broker, that trader will receive what is known as a margin call, which is a request to deposit more or sell of pre-existing assets to fulfill margin requirements. Margin requirements exist and are heavily regulated by the FINRA, NYSE, and the Federal Reserve Board due to the potential of margin trading able to incur astronomical gains along with immense losses. Disturbances in the securities and global financial market are possible as a result of catastrophic losses through margin trading.This is why margin trading is firmly regulated and the reason behind some brokerages raising their minimum margin requirements.
Read this Term will take into effect from February 9, 2100 hours GMT.
A Global Broker
Headquartered in Australia, ThinkMarkets is one of the reputed global brokerage brands and is regulated in multiple jurisdictions. Offerings of the platform include trading services with
forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Read this Term and contracts for differences (CFDs) of indices, stocks, commodities and cryptocurrencies.
The brokerage platforms list more than a thousand share CFDs of the companies listed in several global stock exchanges.
Meanwhile, the broker is focused on the expansion of its services. It entered the institutional space last year with the launch of a United Kingdom-regulated multi-asset liquidity platform.
Moreover, ThinkMarkets is aggressively promoting its brand and inked a big-ticket sponsorship deal with Liverpool FC, one of the most popular English football clubs. Furthermore, the broker acquired a Japanese forex company last year to strengthen its presence in the Asian markets. It even opened an office in Tokyo.
ThinkMarkets announced on Tuesday that the broker is increasing the margin requirement of several contracts for differences (CFDs) instruments due to ‘unprecedented’ volatility in the global equities market, causing a liquidity crunch.
“Due to unprecedented volatility and low levels of liquidity in the global equity markets, ThinkMarkets is increasing the margin requirements on a selection of CFD equity products across our MT4, MT5 and ThinkTrader platforms,” the broker noted.
In addition, it highlighted that the margin changes for some of the products were significant and urged traders to make sure that their accounts are ‘capitalized well enough to avoid a margin call’.
The changes in the
margin requirements
Margin Requirements
A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities present in a margin account. While 25% is the minimum industry requirement, trading brokerages sometimes require between 30% to 40% of the total securities value as a margin requirement as a way to reduce the risk of an investor potentially defaulting on the loan. Why Are Margin Requirements Important?Ex:) A trader possesses a margin account equity sum of $5,000, which means the trader must maintain at least $1,250 in their margin account. Should the trader’s equity appreciate up to $7,500, then the trader’s margin requirements increase from $1,250 to $1,875. However, should a trader’s equity account fall below margin requirements set forth by a broker, that trader will receive what is known as a margin call, which is a request to deposit more or sell of pre-existing assets to fulfill margin requirements. Margin requirements exist and are heavily regulated by the FINRA, NYSE, and the Federal Reserve Board due to the potential of margin trading able to incur astronomical gains along with immense losses. Disturbances in the securities and global financial market are possible as a result of catastrophic losses through margin trading.This is why margin trading is firmly regulated and the reason behind some brokerages raising their minimum margin requirements.
A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities present in a margin account. While 25% is the minimum industry requirement, trading brokerages sometimes require between 30% to 40% of the total securities value as a margin requirement as a way to reduce the risk of an investor potentially defaulting on the loan. Why Are Margin Requirements Important?Ex:) A trader possesses a margin account equity sum of $5,000, which means the trader must maintain at least $1,250 in their margin account. Should the trader’s equity appreciate up to $7,500, then the trader’s margin requirements increase from $1,250 to $1,875. However, should a trader’s equity account fall below margin requirements set forth by a broker, that trader will receive what is known as a margin call, which is a request to deposit more or sell of pre-existing assets to fulfill margin requirements. Margin requirements exist and are heavily regulated by the FINRA, NYSE, and the Federal Reserve Board due to the potential of margin trading able to incur astronomical gains along with immense losses. Disturbances in the securities and global financial market are possible as a result of catastrophic losses through margin trading.This is why margin trading is firmly regulated and the reason behind some brokerages raising their minimum margin requirements.
Read this Term will take into effect from February 9, 2100 hours GMT.
A Global Broker
Headquartered in Australia, ThinkMarkets is one of the reputed global brokerage brands and is regulated in multiple jurisdictions. Offerings of the platform include trading services with
forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest trading market by volume. According to the Bank of International Settlements (BIS) latest survey, the Forex market now turns over in excess of $5 trillion every day, with the most exchanges occurring between the US Dollar and the Euro (EUR/USD), followed by the US Dollar and the Japanese Yen (USD/JPY), then the US Dollar and Pound Sterling (GBP/USD). Ultimately, it is the very exchanging between currencies which causes a country’s currency to fluctuate in value in relation to another currency – this is known as the exchange rate. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.But thanks to the invention of the internet and advances in financial technology from the 1990’s, almost anyone can now start trading this huge market. All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i.e. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis. Technical analysis refers to using mathematical tools and certain patterns to help decide whether to buy or sell a currency pair, and fundamental analysis refers to gauging the national and international events which may potentially affect a country’s currency value.
Read this Term and contracts for differences (CFDs) of indices, stocks, commodities and cryptocurrencies.
The brokerage platforms list more than a thousand share CFDs of the companies listed in several global stock exchanges.
Meanwhile, the broker is focused on the expansion of its services. It entered the institutional space last year with the launch of a United Kingdom-regulated multi-asset liquidity platform.
Moreover, ThinkMarkets is aggressively promoting its brand and inked a big-ticket sponsorship deal with Liverpool FC, one of the most popular English football clubs. Furthermore, the broker acquired a Japanese forex company last year to strengthen its presence in the Asian markets. It even opened an office in Tokyo.
Source: https://www.financemagnates.com/forex/brokers/thinkmarkets-to-increase-margin-on-share-cfds-due-to-volatility/