Margin Trading Policy
This Margin Trading Policy outlines the terms and conditions governing margin trading activities with Midaz ("we," "us," or "our" ). Margin trading involves significant risk and is not suitable for all investors. By engaging in margin trading, you acknowledge and accept these risks.
1. What is Margin Trading?
Margin trading allows you to trade financial instruments using borrowed funds from Midaz . This means you can open positions larger than your available capital, amplifying both potential profits and potential losses. The initial capital you put up is called "margin."
2. Leverage
Leverage is the ratio of the total value of your position to the required margin. For example, 1:100 leverage means that for every
1ofmargin,youcancontrol
1ofmargin,youcancontrol100 worth of the financial instrument. While leverage can magnify gains, it can also magnify losses.
3. Margin Requirements
Initial Margin: The minimum amount of funds required to open a new position. This is typically a percentage of the total value of the trade.
Maintenance Margin: The minimum amount of equity (account balance + unrealized profit/loss) that must be maintained in your account to keep open positions. If your equity falls below this level, you may receive a margin call.
4. Margin Call and Stop Out
Margin Call: If your account equity falls below the maintenance margin level, we may issue a "margin call," requesting you to deposit additional funds to bring your equity back above the required level.
Stop Out Level: If your account equity continues to fall and reaches a predetermined "stop out level" (e.g., 50% of maintenance margin), your open positions may be automatically closed by our system, starting with the least profitable ones, to prevent further losses and protect your account from going into a negative balance. This is done without prior notice.
5. Risks of Margin Trading
Amplified Losses: You can lose substantially more than your initial investment.
Rapid Account Depletion: Market movements can be sudden and significant, leading to rapid depletion of your account balance.
Margin Calls: You may be required to deposit additional funds on short notice to maintain your positions. Failure to do so may result in the forced liquidation of your positions.
Negative Balance: While we strive to prevent negative balances through stop-out mechanisms, extreme market conditions can still lead to your account balance falling below zero.
6. Negative Balance Protection
Midaz aims to provide negative balance protection, meaning that clients cannot lose more than the funds deposited in their trading account. However, this protection may not apply under all circumstances, especially during extreme market volatility or if you have multiple accounts.
7. Monitoring Your Account
It is your sole responsibility to continuously monitor your account balance, margin levels, and open positions. We are not obligated to issue margin calls or close positions before the stop-out level is reached.
8. Changes to Margin Requirements
We reserve the right to change margin requirements at any time, especially during periods of high market volatility or significant news events, without prior notice.
9. Consent
By engaging in margin trading with Midaz , you acknowledge that you have read, understood, and agree to this Margin Trading Policy and the inherent risks involved.
10. Contact Us
If you have any questions about margin trading or this Policy, please contact our support team at [email protected]