Principles

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.

 

This site uses cookies, which are used for an improved use of the website, as well as the analysis for further improvement. By continuing to use this website, you agree to the use of cookies. You also agree to our Terms and Conditions for Website Usage and our Disclaimer. More information can be found in the privacy policy and legal notes.