How are the NEW margin requirements calculated?
The NFA rule states that forex dealer members are required to collect a margin deposit of 1% of the notional value of the positions held in the US dollar, British pound, the Swiss franc, the Canadian dollar, the Japanese yen, the Euro, the Australian dollar, the New Zealand dollar, the Swedish krona, the Norwegian krone, and the Danish krone and 4% of the notional value of other positions. Directly adhering to the 1% and 4% margin requirements would cause margin amounts to change as market rates fluctuate. For traders, this would mean watching not only your trades, but monitoring frequently changing margin levels. At FXCM, we have learned that many clients like trading with fixed margins. Therefore, we have decided to add a slight cushion to the new NFA requirements that should help alleviate daily or even weekly fluctuations. In most cases, the cushion we have added means that margin levels should not change more than once a month. Additionally, to further keep things simplified, marg
