1. Triple swap
At the end of the trading session on Wednesday a triple swap is charged on all open positions, for all TenkoFX trading instruments. This occurs because the Forex market settles all deals on the second business day after the transaction. Therefore, when an open position is moved from Wednesday to Thursday, the value date is postponed until Monday, i.e. swap rates are tripled.
2. Margin requirement
The margin, or maintenance, requirement is the amount of collateral that must be reserved in order to keep an open position. Collateral is required to avoid the risk of a negative balance on the account after all positions have been closed.
To calculate the collateral required for a projected transaction, the leverage, deposit currency and intended size of transaction should be indicated.
A margin call is a situation where a trader is not permitted to increase the size of the open positions on the trading account because the current equity of the account is below the margin requirements. In this case, any open positions could be either closed or hedged by the trader in order to reduce the total exposure. A margin call does not trigger automatic closing of open positions by the broker.
A margin call is issued when the margin level (equity to margin ratio) falls below 100%. Buy or sell limit orders which lead to an increase in position size will be automatically rejected. If required, SMS margin call notifications can be set within the TenkoDESK Profile page.
A stop outis an automatic procedure that is triggered when the margin level reaches or falls below the specified rate 50%. In this case, TenkoFX has the right (but is not obligation) to reduce the size of open positions on the account, either in whole or in part. This is done by closing out current positions and/or opening new positions in the opposite direction.