Margin rules

Margin – securities loan

Securities have to be deposited in a so-called margin account in order to trade stock exchange transactions. We explain the requirements for a margin account here.

Principles

The trader has to deposit securities in a so-called margin account to trade stock exchange transactions. This kind of security is known as a margin.

The initial margin condition is calculated before you open each new position that requires a margin. The securities that are available are continually compared with the current items to ensure that they are maintained. At the same time, the conditions for new positions are compared constantly. The margin conditions, which may have been changed by the stock exchange, are included here too. The comparison is normally performed by the system every minute; however, this does not represent any legal liabilities or particularly any legally binding protection from losses. In the case of any losses of whatever kind, there is no claim for compensation. Each customer is responsible for their positions and the risks resulting from them.

Higher margin conditions may apply for the account in particular cases, especially if positions are to be maintained overnight. The margin conditions also change in an open position, if the position was opened at a time when a lower, so-called “intraday margin” applied (security valid for a day, normally 50% of the stock exchange margin requirement). If the same position is kept beyond the time from which the so-called “overnight margin” becomes valid (overnight security, normally 100% of the normal stock exchange margin requirement), the margin conditions then increase. If the necessary securities are not adequate, the position will be closed/liquidated. This generally happens at the end of the trading day. Please check the margin for each product before you take out positions, which are supposed to be maintained overnight.

The risk management system is established in such a way that positions are liquidated according to pre-programmed rules. However, there is no guarantee that liquidation will take place. The broker managing the account has the right to liquidate positions if the margin is not adequate. However, there is no legal claim on the part of the account holder to this and therefore no guaranteed protection from losses either. The conditions for liquidating a position may change at short notice through a wide variety of factors and additions may be made to the relevant conditions at any time. The broker does not have to inform you of these.

Several accounts belonging to an account holder may possibly be used by the broker to provide collateral or compensate for differences. The holder of the account does not have any claim to have accounts offset against each other, however.

Types of accounts and their performance characteristics

Cash account
Shares

The credit in the account must be sufficient to cover the full purchase price when buying each share, including the commission and transaction fees. Customers cannot short-sell any shares. The amount is debited immediately. The timing for the value date of the sale of shares after the settlement of the share is governed by the statutory provisions of the country concerned, e.g. three working days in the USA, UK and Switzerland; two working days in Germany.

Share options

Trading with covered share options (covered call writing), the purchase of call options (buying calls) and the purchase of put options (buying puts) are only available to a limited degree. Cash from the sale of options is settled within one day. You must also be certified for share trading.

Please note: The cash account only allows you to trade in products in the base currency. Your base currency is the currency in which you manage your account.

Account with security deposits (leverage effect)/margin accounts
Shares

The customer’s account credit must cover the margin requirements for all the long and/or short sell share positions, including all the commission and transaction fees. The broker does not contact customers by phone or in any other way to request them to close positions (margin calls) and retains the right to liquidate customers’ positions immediately if their credit falls below the margin minimum to maintain the position. The cash figures are immediately updated after purchases and sales.

Shares & share options

Buying and selling options – in order to buy options, the customer must have deposited the premium (i.e. the purchase price) including the commission and transaction fees. In order to sell options, the customer must be able to cover the margin requirements and the commission and transaction fees. The cash figures for share sales are immediately updated. You also need to be certified for a margin account to trade in shares.

Futures

Customers can open positions in futures contracts as long as they can meet the initial margin and the minimum margin to maintain the positions. The broker does not contact customers by phone or in any other way to request them to close positions (margin calls) and retains the right to liquidate customers’ positions immediately if their credit falls below the margin minimum to maintain the position. The cash figures are immediately updated after any purchases or sales of futures.

Options on futures

Buying and selling puts and calls on futures. The cash figures are immediately updated after purchases and sales of options on futures. You must also be certified for a margin account for trading in futures.

Single stocks futures

Customers can open futures positions on shares, ETFs (funds) and narrow-based equity indices. You must be able to meet the initial margin and the minimum margin to maintain the positions. The broker does not contact customers by phone or in any other way to request them to close positions (margin calls). He retains the right to liquidate customers’ positions immediately if their credit falls below the margin minimum to maintain the position.

Please note: The account with securities (leverage effect)/margin accounts allows you to trade in products in any currencies without actively exchanging funds into the currency, in which the products are traded.

 

Margin requirements

We have made the information on the margin requirements more customer-friendly. In order to find the margin requirements for a particular product, please use the product search facility.

You can search for each product, which can be traded in our system, there. The margin rules for these products can also be read in the search results, among other things.

Margin loan – shares

A margin loan is automatically granted to accounts with securities (leverage effect) – so-called margin accounts – for trading in shares. The buying power is calculated at 1:4. If customers make use of the leverage, they are not charged any fees, but interest on debit balances amounting to:

Base currencyDebit amount up toInterest rate at loanDebit amount up toInterest rate at loan
AUD 150.000  3,45 1.529.999  3,25
CAD 140.000  3,45 1.369.999  3,25
CHF 130.000  3,45 1.289.999  3,25
EUR 80.000  3,45 839.999  3,25
GBP 60.000  3,45 609.999  3,25
HKD 780.000  3,45 7.799.999  3,25
JPY 11.905.000  2,95 119.047.999  3,25
KRW 100.000.000  4,45 999.999.999  0,75
USD 100.000  3,45 999.999  3,25

 ‚Äč

For example:

A credit sum of EUR 10,000 in the account allows you to purchase shares worth EUR 30,000.

Please note:

No margin loan is granted to cash accounts for trading in shares.

 

Physical delivery and liquidation rules for futures and futures options

In the case of futures contracts, which are settled through the physical delivery of the underlying commodity, customers may not issue an order for the delivery of the underlying commodity or receive any such order. Certain foreign exchange futures are excluded from this rule (see the following table).

In order to prevent the delivery of an expiring futures contract, customers have to exchange (roll or prolong) their position for one with a later expiry date or close their positions before the close-out deadline (the first day on which a physical delivery order can be placed). Generally, the close-out deadline for long positions is set as the end of the fourth working day before the first notice day specified by the stock exchange (the first day on which the holder of a short position can notify the delivery of the goods with the stock exchange). For traders with short positions, the time set as the end of the fourth working day before the last trading day specified by the stock exchange is viewed as the close-out deadline. In the case of certain contracts, which you can see in the table on this page, the time frame prior to the period of the close-out deadline is different.

It is the responsibility of the customer to obtain all the necessary information about the close-out deadline and act accordingly. If a customer does not part with a position with a physical delivery by the close-out deadline, the broker can or has to liquidate this position in the expiring contract without sending any other message to the customer.
PLEASE NOTE: Any working orders are not affected by this kind of liquidation. This may create a situation where working orders may possibly continue to exist until the closure of the futures position liquidated by the broker and possibly could be traded. This then creates a situation that a working order originally given to close a position is reversed and a position is opened against the customer’s will.
For their part, customers must ensure that any open working orders of closed positions are adapted accordingly to the actual portfolio situation.

Summary of the approach in the case of the physical delivery of futures

ContractDelivery allowedMost extreme close-out deadline
ZB, ZN, ZF (ECBOT) No 2 hours before the end of the open outcry trade on the trading day before the first notice day (longs) or the last trading day (shorts)
ZT (ECBOT) futures, Japanese government bond futures (JGB) No From the end of the second-to-last working day before the first position day (longs) or the last trading day (shorts)
EUREXUS futures No From the end of the third-to-last working day before the first position day (longs) or the last trading day (shorts)
EUREXUS 2-year jumbo bonds (FTN2) or 3-year bonds (FTN3) futures No From the third-to-last working day before the first position day (longs) or the last trading day (shorts)
IPE contracts (GAS, NGS) No From the end of the third-to-last working day before the first position day (longs) or the last trading day (shorts)
GLOBEX LIVE CATTLE (LE) No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)
GLOBEX NOK, SEK, PLZ, CZK, ILS, KRW and HUF, and corresponding euro rates No From the end of the fifth-to-last working day before the last trading day for longs and shorts
GBL, GBM, GBS (Eurex), CONF (SOFFEX) No 2 hours before the end of trading on the last trading day
GLOBEX currency futures (EUR, GBP, CHF, AUD, CAD, JPY, HKD) Yes* Information not available*
GLOBEX Ethanol futures (ET) No From the end of the fifth-to-last working day before the first position day (longs) or the last trading day (shorts)
All other contracts No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)

* As you can only keep limited amounts of foreign currency in cash and IRA accounts, the “All other contracts” line applies to cash and IRA accounts for these kinds of foreign currency products.

Summary of the approach in the case of the physical delivery of futures options

ContractDelivery allowedMost extreme close-out deadline
OZB, OZN, OZF, OZT (ECBOT) No 4 hours before the end of the open outcry of trading on the trading day before the first notice day (longs) or the last trading day (shorts)
All other contracts No From the end of the third-to-last working day before the first intent day (longs) or the last trading day (shorts)

Please note

The name of the expiration month for these products is known as “the month which follows the actual expiration of this product” or “the delivery date for these products” as the industrial standard in conjunction with certain commodities and options. The ATS trading software could also contain incorrect expiration or notice date information. Most US government and German bonds futures options are examples of atypical dating.

The normal commission is calculated for expiring or prolonging contracts.

 

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