Thread: FXCM LLC Margin Requirements

Here are the detailed margin requirements for FXCM LLC:

I am a Trader and not familiar with the calculations around margin requirements. We were warned someplace on DailyFX that margins would be hiked at precisely 2:15 on Sunday afternoon (PST). Not sure why they raise and lower Margins ?? Do you know ?? Is it because the banks are forever hard-pressed for cash ??
What with 1) low-liquidity, 2) wide spreads, and 3) assured volatility at some point on Sunday..Trader BEWARE !!!

Hello PipSqueak2012, and thank you for your post!


Why are margin requirements subject to change?

It has to do with the way that margin is calculated. The formula to calculate margin is the following:

(Notional Value of the Pair * Leverage * Trade Size)

Let's take a look at EURUSD for example. At the time this was written the notional value of EURUSD was about 1.2845. Let's use the calculation above to see what the approximate margin requirement would be with 50:1 (approximately 2%) leverage for a 1K EURUSD trade.

(1.2845 * .02 * 1000) = USD 25.69

Now you'll notice that the new margin requirement for a 1K EURUSD trade with 50:1 leverage is going to be USD 30.00. Why doesn't the calculation give us the exact same number? It's because a cushion is added to help alleviate daily/weekly fluctuations. Prices are constantly fluctuating so the cushion is added to prevent us from having to constantly change the margin requirements. Given the calculation above FXCM will still have to periodically change the margin requirements based on market conditions. Please click here (Margin Trading and Leverage FAQ) for more information about margin and leverage.


Thank you again for your post PipSqueak2012! Please feel free to post with additional questions or contact me directly at julius@fxcm.com

Originally Posted by PipSqueak2012

I am a Trader and not familiar with the calculations around margin requirements. We were warned someplace on DailyFX that margins would be hiked at precisely 2:15 on Sunday afternoon (PST). Not sure why they raise and lower Margins ?? Do you know ?? Is it because the banks are forever hard-pressed for cash ??
What with 1) low-liquidity, 2) wide spreads, and 3) assured volatility at some point on Sunday..Trader BEWARE !!!