The Dynamic Margin Requirement is a mechanism implemented to manage market volatility during key events and specific periods, such as economic announcements, weekends, and public holidays. Dynamic Margin Requirement ensures that higher margin requirements are applied to mitigate clients' exposure and maintain market stability.
Dynamic Margin Requirement Timing and Asset Classes
Dynamic Margin Requirement applies to all asset classes, including Forex, metals, indices, commodities, crypto, and shares. The duration of the Dynamic Margin Requirement period depends on the event type. For instance:
- News Releases: 10 minutes before and 2 minutes after.
- Weekends/Public Holidays: 60 minutes before session closure, resetting upon market open
Key Scenarios for Dynamic Margin Requirement Application
During significant economic announcements, such as Non-Farm Payrolls (NFP), Dynamic Margin Requirement is applied to orders placed shortly before and after the release. After the event, the margin is recalculated based on the account's equity and leverage.
Example:
- An NFP release is scheduled for 13:30 UTC.
- A trade of 2 lots on EURUSD with maximum leverage of 3000 is opened at 13:21 UTC.
- Dynamic Margin Requirement applies leverage of 1:200 during the event window (13:20–13:32 UTC).
- Margin required increases from 66.67 EUR to 1,000 EUR
Weekends and Public Holidays
Ahead of weekends and market holidays, Dynamic Margin Requirement applies higher margin requirements to mitigate risks from extended market closures.
Example:
- A trade of 10 lots on UK100 is opened at 23:30 server time Friday.
- With Dynamic Margin Requirement leverage of 1:200 during the pre-closure window (22:55–23:55), the margin required increases from 166 GBP to 415 GBP
