Margin information

Review our margin requirements and other information related to margin trading with Saxo

 Swiss residents only. EU residents, click here.

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.

Read more about Initial and Maintenance margin here.

To find FX margin information, search for a specific instrument in our platform preview and open its product overview. Select the info button (i) on the top right, then go to the Instrument tab.

Rates are standard retail FX margin rates; actual margin levels may vary depending on client classification.

FX is a leveraged product, meaning that it provides a trader with the ability to control large amounts of capital using very little money; the higher the leverage, the higher the level of risk.

Margin requirements differ by currency pair 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.

Saxo Bank offer tiered margin methodology as a mechanism to manage political and economic events that may lead to the market becoming volatile and changing rapidly.

For further explanation of the above methodology please click here.

A complete list of margin requirements by currency pair can be viewed under Margin & Trading Requirements as well as in the SaxoTrader platforms, under Trading Conditions.

Margin requirements may be changed without prior notice. Saxo Bank reserves the right to increase margin requirements for large position sizes, including client portfolios considered to be of high risk.

If at any time whilst an FX position is open, the margin required to maintain that position exceeds the funds available on account, you are at risk of a stop-out. You will be notified when a margin call occurs, and are required to reduce the size of open positions and/or deposit more funds (margin collateral) into the account. In the event that no action is taken Saxo may close some or all of the open positions in order to reduce exposure to an acceptable level.

Collateral rates for margin trading

(EU residents: professional clients only. Outside EU: available for all clients including CH residents).

Saxo Bank Switzerland allows a percentage of the investment in certain Stocks and ETFs to be used as collateral for margin trading activities. The collateral value of a stock or ETF position depends on the rating of the individual stocks or ETFs – please see conversion table below.

Rating
1
2
3
4
5
6
Collateral value of position
75%
50%
50%
25%
0%
0%

Example: 75% of the value of a position in a Stock or ETF with Rating 1 can be used as collateral (instead of cash) to trade margin products such as Forex, CFDs, Futures and Options. Please note that Saxo Bank Switzerland reserves the right to decrease or remove the use of Stock or ETF investment as collateral for large position sizes, or stock portfolios considered to be of very high risk.

To find the rating and collateral value, search for a specific instrument in our platform preview and open its product overview. Select the info button (i) on the top right, then go to the Instrument tab. 

Saxo Bank Switzerland allows a percentage of the investment in certain bonds to be used as collateral for margin trading activities.

The collateral value of a bond position depends on the rating of the individual bond, as outlined below:

Rating definition*Collateral percentage
Highest Rating (AAA)95%
Very High Quality (AA)90%
High Quality (A)80%

 

* as rated internally by Saxo Bank

Example: 80% of the market value of a bond position with an A rating can be used as collateral (instead of cash) to trade margin products such as Forex, CFDs or Futures and Options.

Please note that Saxo Bank reserves the right to decrease or remove the use of bond positions as collateral.

For further guidance or to request the rating and collateral treatment of a specific or potential bond position, please send an email to fixedincome@saxobank.com or contact your account executive.

Collateral rates differ by instrument and depend on the market value of the given instruments. Collateral tiers may be subject to regulatory mandated maximums and may be subject to change according to the underlying liquidity and volatility of the instrument. For this reason, the most liquid instruments in most cases provide higher collateral rates.

Saxo offers the tiered collateral methodology as a mechanism to manage gap and liquidity risk. With tiered collateral, the average collateral rate (‘Blended collateral rate’) decreases as the market value of the instrument increases. The opposite is also true; as the market value of the instrument decreases the average collateral rate increases. This concept is illustrated below:

Picture1

The different market values (or tiers) are defined as an absolute number of U.S. Dollars. (USD) across all instruments. Each instrument has a specific collateral rate in each tier.

Please note that the collateral rate may be changed without prior notice.

Saxo reserves the right to reduce the collateral rate for large positions sizes, including client portfolios considered to be of high risk.

This is built upon the collateral rates, where all equities are assigned both a margin requirement (for CFDs and options) and a value as collateral.

If the equity used as collateral is the same as the underlying for the leveraged position, an additional haircut will be deducted. The additional “concentration haircut” will be equal to the margin requirement of the leveraged position.

The collateral value of the underlying equity will be equal to the collateral value of the equity minus the margin requirement of the leveraged position.

This will make the margin utilization more sensitive to price movements in the underlying equity. The concentration haircut is introduced to account for the inherently riskier position when the exposure is concentrated around one underlying and is not diversified.

Example

A client on flat margin rates wants to buy 25.000 USD of CFDs in a company, and already has 10.000 USD stock in the same company. Since the underlying of the CFD position is the same as the stock, a concentration haircut will be deducted. If the company stock is rating 1, the calculation for the margin utilization will be:

Portfolio, CFDs and Shares in same underlyingValue (USD)
CFDs25,000
Shares10,000
Margin Requirement, 10%2,500
Collateral haircut, 25% of shares in Company2,500
Concentration haircut = Margin requirement for CFDs2,500
Collateral value of shares after concentration haircut5,000
Margin Utilization = Margin Requirement/Collateral value of stock50%

If the underlying stock of the CFD position had been different from the stock of the client, then a margin utilization of 33% would apply.

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All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

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