Saxo Markets Australia Introduces New Margin Methodology for CFD and Forex Products

Fazzaco has learned that Saxo Markets Australia, a wholly owned subsidiary of Saxo Bank, is introducing new minimum initial and maintenance margin calculations for all CFD and Forex products.

The changes to the margin methodology have already come into effect since March 17, 2021 at 9am AEDT. The reform's aim is to better protect traders against adverse market conditions as well as to comply with ASIC's Product Intervention Power Order. 

The new initial and maintenance margin framework for CFDs and FX will create a buffer between clients' trading capacity and the margin close-out level. This means clients' margin requirements will now consist of two elements:

1. The Initial margin: the amount of margin required to open a new position

2. The Maintenance margin: the amount of margin required to maintain an open position.

Change in margin methodology for all clients: effective 9am AEDT 17 March

If you are holding both a long and short position in the same instrument that will not net at end-of-day, the margin will now be calculated on the largest leg. At the same time interest margin for FX forward trades will no longer be charged. Additionally, intraday margin on CFDs will no longer be available. 

New Margin close-out level for Retail Clients: effective 9am AEDT 17 March

If your maintenance margin utilisation reaches or exceeds 100%, your margin positions will automatically be closed out , and any open orders on margin products will be automatically cancelled.

Negative balance protection for Retail Clients

From 17 March 2021, negative balance protection will be applied to accounts that open a FX or CFD position on or after 9:00 AM AEDT, 17 March 2021. For any loss after any/all collateral on the open FX or CFD position, including cash deposits and unrealised profit/loss on Futures and Options, are protected against negative balance. 

Margin ceiling for Retail Clients

From 9:00 AM AEDT, 17 March 2021, the margin ceiling is a restriction (or limit) on opening new exposure that would bring the total portfolio initial margin requirement above AUD 800,000 to prevent from opening new exposure but will be able to maintain the existing position (s) as long as margin utilization remains below 100%.