Margin Policy & Procedures

Trading foreign exchange (forex) on margin carries a high degree of risk, especially in fast moving markets. In accordance with MF Global FX Margin Policy, procedures have been implemented to protect you as well as to comply with relevant IIROC regulations. Please take a few minutes to read through the Margin Policy and Margin Call Procedures, and don't hesitate to contact us if you have any questions.

Margin Policy

Trading forex on margin with MF Global FX requires that each trading account have a sufficient cash balance (equity) to cover open positions at all times. Please click here to view margin rates for currency pairs traded at MF Global FX, and also here to view the Initial, Maintenance and Liquidation Margin Requirements for U.S. Dollar Mini Accounts.

The Initial Margin Requirement is the amount in U.S. Dollar or Canadian Dollar required to open a new position. This is calculated by applying the Initial Margin Rate, which varies according to the currency pair, to the gross principal value of the contract.¹

The Maintenance Margin Requirement is the amount in U.S. Dollar or Canadian Dollar required to maintain an open position and is equal to the Initial Margin Requirement.

The Liquidation Margin Requirement is the amount in U.S. Dollar or Canadian Dollar at or below which all open positions in the account will be automatically liquidated. This amount is equal to 10% of the Maintenance Margin Requirement.

MF Global Canada Co. is a member of the Investment Industry Regulatory Organization of Canada (IIROC). Eligible client accounts held by IIROC members are insured against dealer insolvency, within specified limits, by the Canadian Investor Protection Fund (CIPF). As a regulated member of the industry, MF Global FX margins the unhedged foreign exchange positions of its clients according to IIROC Regulation 100.2 (d)(iv).

Margin rates are subject to IIROC regulation and may change at anytime without notice. It is the trader’s responsibility to ensure there is sufficient margin in the account at all times.

Margin Call Procedures

There are 3 settings in the [MC] (for Margin Call) column in the [Accounts] window on the trading platform:

“N” means there is sufficient Maintenance Margin
“W” means a Maintenance Margin Warning has been issued
“Y” means liquidation of positions due to insufficient margin

If account equity fails to meet Maintenance Margin Requirement, MF Global FX will issue a Maintenance Margin Warning. A “pop-up” message will appear in the [Messages] window and a “W” will appear on the [MC] column in the [Accounts] window of the trading platform.

1. No new open positions² will be allowed on the account until the Maintenance Margin Warning or “W” has been reset to “N” by MF Global FX.
2. If the Maintenance Margin Warning persists after 5 PM EST, MF Global FX will issue a Maintenance Margin Warning e-mail to the account holder with details and a deadline for posting the required additional margin, which is to be determined at the discretion of MF Global FX .
3. The Maintenance Margin Warning status will be reset by MF Global FX after 5 PM EST if the account equity meets or exceeds the Maintenance Margin Requirement.³

Some or all open positions will be liquidated if one of the following events occurs:

1. Where account equity falls to or below Liquidation Margin Requirement for all open positions, a Liquidation Margin Call will trigger and all open positions will be liquidated immediately, regardless of any previous Maintenance Margin Warning issued by e-mail, phone, or system messages. At such time, no notices or additional warnings will be provided by MF Global FX.
2. Where an account has not been sufficiently funded within the deadline set in a Maintenance Margin Warning e-mail; some or all open positions will be closed. At this time, no notices or additional warnings will be provided by MF Global FX.

A “Y” appears on the [MC] column in the [Accounts] window of the trading platform whenever positions are liquidated due to insufficient margin.

The MF Global FX Trading Station II platform is designed to automatically liquidate all open positions if your account equity falls below Liquidation Margin Requirement so that you cannot lose more than the funds you have on deposit in your account. Please carefully review the Risk Information Document for Derivatives, and the terms and conditions in the Client Agreement accessible from this website.

MF Global FX will not be responsible for losses, lost profits, and other direct or indirect damages resulting from the closing of open positions due to insufficient margin. Any failure by MF Global FX to enforce its rights to liquidate shall not be deemed a waiver by MF Global FX of those rights.

¹ Margin Rate is a true percentage applied to the gross principal value of the contract. Please consult Margin Requirements for U.S. Dollar Mini Accounts for illustrations.

² Once account equity falls below Maintenance Margin Requirement and the [MC] status is at “W”, existing open positions in the account cannot be hedged until the [MC] status is reset to “N”.

³ The “W” setting in the [MC] column may be reset to “N” on request when account equity exceeds Maintenance Margin Requirement.