Transactions conducted in the SWFX marketplace may be done on a margin trading basis, enabling a client to execute trades larger than the deposit, amplifying price movement effect. The multi-instrument exposure of the account is limited by the total trading line which is calculated by multiplying the Equity of the account by the leverage agreed with Dukascopy Bank SA. By default the initial leverage for regular trading hours is set to 1:100, which allows to increase exposure up to a 100 times the amount of the equity, but can be set up to 1:200 by request (restrictions may apply).
The initial leverage of the account can be adjusted to different levels (e.g. 1:50 or 1:20) which are predefined by Dukascopy Bank SA and the client. The margin necessary to increase the exposure is computed at trade initiation, and the amount of Free and Used Margin is updated in real time on the trading platform.
Due to specific trading conditions several instruments have higher margin requirements (lower leverage). See the widget below.
- The minimum margin requirements will differ if the initial leverage is changed.
- See section "Over-the-weekend leverage" for additional information about weekend leverage.
- The lower leverages remain in place regardless of the client's requests for leverage increase.
- If equity for the self trade account is less than CHF 20 or equivalent in foreign currency, the account may be blocked by Dukascopy Bank.
Leverage on weekends and other off-market days is 1:50 by default. The clients may increase it to 1:100 if equity is less than 50'000 USD. Weekend leverage applies to only those instruments which have higher leverage on weekdays.
If equity for the self-trader's account is less than CHF 20 or equivalent in foreign currency, the account may be blocked by Dukascopy Bank.
In order to protect clients from incurring liability above their equity and protect Dukascopy Bank SA from associated risks, the following minimum margin policy applies: The minimum equity requirement for the self-trading account is 20 CHF. For accounts with different base currency the minimum amount of equity is calculated at the exchange rate of the latest settlement. All open positions may be closed and the account may be blocked should the equity on the account reach the minimum margin requirement.
The minimum margin required to open a position depends on the desired leverage, instrument and current market prices.
The Use of Leverage is an indicator showing how much of the collateral is currently used by the exposure on the trading account. It is displayed in percentage in real-time and calculated as follows:
Use of leverage
=
Used Margin*
Equity
x
100%
- *Equals to the exposure divided by leverage.
Example
Position of 1 mio EUR/USD 1.2000 Exposure on the account USD1'200'000 Profit and losses 0 Leverage authorized for the account 1:20 Equity USD100'000 Used Margin= Exposure on the account/ Leverage= USD1'200'000/ 20= USD60'000
Use of leverage= Used Margin/ Equity= 60'000/ 100'000= 60%Margin call (Use of leverage> 100%) means a situation where the margin requirements do not allow the client to increase exposure on his account. The client may only execute trades to reduce exposure, by closing or hedging the existing net positions. Despite the margin call level being reached, the positions will not be closed automatically. The automated system will cancel all placed bid/offer orders that can increase the exposure.
Margin cut or cut-off level (Use of leverage≥ 200%). If the Use of Leverage reaches or exceeds 200%, Dukascopy Bank has the right (but not the obligation) to fully or partially reduce the client's exposure by closing existing positions and/or by opening new positions in the opposite direction. Usually the system automatically reduces exposure so that the Use of Leverage is brought to approximately 100%. However, traders can select to fully close all open positions in case of a margin cut.
Use of leverage Description 0% No exposure <100% Normal status ≥100% Margin call: trader is not able to increase exposure on the account if the Use of leverage is more than 100% ≥200% Margin cut: typically system will open hedging positions in the opposite direction for all positions which contribute to exposure on the account. The Use of leverage will be decreased to 100% or less. Leverage on weekends and other off-market days is 1:50 by default. The clients may increase it to 1:100 if equity is less than 50'000 USD. Weekend leverage applies to only those instruments which have higher leverage on weekdays.
Standard algorithm: Over-the-weekend trading conditions are effective starting 3-4 hours before each market closure (weekend, holidays, etc) until re-opening of the market. For usual Friday night closure, over-the-weekend conditions would become effective at 18:00 GMT, which may cause the Use Of Leverage to increase if there is a net exposure. Regardless of the over-the-weekend margin conditions, the general execution mechanisms of the margin call and margin cut remain the same. That is, if the amount of equity on the account is not sufficient to support existing positions with the weekend leverage, the margin cut procedure will be applied to the account (see paragraph Margin Call and Margin Cut).
The maximum net exposure of each currency pair or CFD instrument is calculated as an aggregate figure based on all sub-accounts of the client.
Clients may request to waive/increase the maximum exposure limit. In this case the account leverage will be reduced to 1:20 (1:10 over-the-weekend).
The exact limits are specified in the tables below:
Instrument Maximumexposure in millions of primary currency All currency pairs
(except the pairs in the next rows)15 HKD/JPY, USD/CNH and USD/MXN 5 EUR/PLN, TRY/JPY, USD/PLN, CAD/HKD, EUR/CZK, EUR/DKK, EUR/HKD, EUR/HUF, EUR/TRY, USD/CZK, USD/DKK, USD/HKD, USD/HUF, USD/ILS, USD/RON, USD/THB and USD/TRY 1 Instrument Maximum exposure in contracts (for CFDs) /
Oz (for precious metals) / USD (for crypto)ADA/USD 30'000 USD equivalent AUS.IDX/AUD 750 BCH/USD 50'000 USD equivalent BRENT.CMD/USD 650 BTC/USD 100'000 USD equivalent BUND.TR/EUR 10'000 CHE.IDX/CHF 350 CHI.IDX/USD 200 COCOA.CMD/USD 225 COFFEE.CMD/USX 940'000 COPPER.CMD/USD 1 mio USD equivalent COTTON.CMD/USX 685'000 DEU.IDX/EUR 250 DIESEL.CMD/USD 1'800 DOLLAR.IDX/USD 25'000 DSH/USD 30'000 USD equivalent EOS/USD 30'000 USD equivalent ESP.IDX/EUR 300 ETH/USD 100'000 USD equivalent EUS.IDX/EUR 900 FRA.IDX/EUR 500 GAS.CMD/USD 4'500 GBR.IDX/GBP 350 HKG.IDX/HKD 1'000 ITA.IDX/EUR 1 mio EUR equivalent JPN.IDX/JPY 20'000 LIGHT.CMD/USD 650 LTC/USD 50'000 USD equivalent NLD.IDX/EUR 4'550 OJUICE.CMD/USX 410'000 PLN.IDX/PLN 1'545 SGD.IDX/SGD 11'220 SOA.IDX/ZAR 2'000'000 USD equivalent SOYBEAN.CMD/USX 223'500 SUGAR.CMD/USD 1'430 TRX/USD 30'000 USD equivalent USA30.IDX/USD 100 USA500.IDX/USD 1'000 USATECH.IDX/USD 300 USSC2000.IDX/USD 2'000 USTBOND.TR/USD 10'000 VOL.IDX/USD 100'000 USD equivalent XAG/USD 40'000 XAU/USD 1'500 XLM/USD 50'000 USD equivalent XPD.CMD/USD 90 AVE/USD 30'000 USD equivalent BAT/USD 30'000 USD equivalent CMP/USD 30'000 USD equivalent ENJ/USD 30'000 USD equivalent LNK/USD 30'000 USD equivalent MAT/USD 30'000 USD equivalent MKR/USD 30'000 USD equivalent UNI/USD 30'000 USD equivalent XPT.CMD/USD 315 YFI/USD 30'000 USD equivalent Exceptions may apply for some clients or some instruments. Information on applicable maximum net exposure limits is available in trading reports section "CFD Instruments" subsection "Maximum Exposure".
Maximum exposure per single stock CFD is 100'000USD or equivalent in other currencies. Clients may request to increase maximum exposure to 250'000USD, in this case leverage will be reduced to 1:2 from default setting of 1:10. Clients may request to increase leverage to 1:20. In this case maximum exposure per CFD will be 50'000USD. Over-the-weekend leverage reduction rules do not apply to single stock CFDs.
Market Maximum exposure
for a share CFDAustria 100'000EUR Belgium 100'000EUR Denmark 750'000DKK Finland 100'000EUR France 100'000EUR Germany 100'000EUR Hong Kong 780'000HKD Italy 100'000EUR Ireland 100'000EUR Japan 10'000'000JPY Mexico 100'000USD equivalent Netherlands 100'000EUR Norway 900'000NOK Portugal 100'000EUR Spain 100'000EUR Sweden 950'000SEK Switzerland 100'000CHF UK 90'000GBP US 100'000USD
Trading on margin carries a high level of risk, and may not be suitable for all investors. It is highly recommended to maintain the Use of Leverage at normal levels. The client must always keep in mind that leverage increases potential loss, as well as potential profit, and invested funds can quickly suffer losses in situations where the market prices exhibit strong volatility, potentially creating an adverse environment for the highly leveraged participant. The client shall be solely responsible for maintaining sufficient margin in relation to the existing positions.
