Margin Close-Out

What is a margin close-out (MCO) rule?

If the total margin in a retail client’s account falls under 50% of the amount of initial margin required in respect of the open positions, the company will close one or more of the positions in order to ensure that retail investors’ margin is not eroded close to zero. MCO also applies to positions with a Stop Loss Order or limited risk protection.

The MCO rule will not prevent investors from choosing to ‘top up’ their margin if they wish to do so.

 

Company’s default MCO rule

 

Under the default setting, when MCO is triggered the open position with the least volume will be closed automatically. This action will be repeated at any time MCO is triggered and may be repeated until all open positions are closed. In case MCO is triggered and the symbol of a position is out of market hours, then the position will not be closed.

In case you have already changed the default MCO rule click here to change back to the default MCO rule, “Lowest Volume”.

 

Other MCO options:

 

Hedge of Newest Positions

 

When MCO is triggered you have the option to automatically open a full-hedged position to the position that was opened last, i.e. in the opposite direction and same amount to the position that was opened last. This action will be repeated at any time MCO is triggered and may be repeated until all open positions are hedged.

In case of any existing Stop Loss or Take Profit, the new related position will have the same rate(s). Also, a Stop Loss on the primary position will become a Take Profit on the new related position, and a Take Profit on the primary position will become a Stop Loss on the new related position. In case the market moves too fast and there is a requote, the system may not hedge the relevant position. In case MCO is triggered and the symbol of a position is out of market hours, then the position will not be hedged.

This method will reduce your exposure, giving you more flexibility to manage your trading account.

Click here to apply "Hedge of Newest Positions" as your MCO rule.

 

Re-Open up to 75% Volume

 

When MCO is triggered you have the option to automatically renew the position that was opened last, up to 75% volume. This action will be repeated at any time MCO is triggered and may be repeated until all open positions are re-opened up to 75% volume. In case of insufficient margin, a position may be re-opened with less than 75% volume, or may not be re-opened at all.

In case of any existing Stop Loss or Take Profit, the new related position will have the same rate(s). In case the market moves too fast and there is a requote, the system may not re-open the relevant position. In case MCO is triggered and the symbol of a position is out of market hours, then the position will not be re-opened.

This method will reduce your exposure, allowing you to stay in the market and continue your trading strategy.

Click here to apply “Re-Open up to 75% Volume” as your MCO rule.

If you wish to change your current MCO rule at any time, please click your preferred choice above.

Once the company receives your explicit MCO rule request, your request will be processed within (3) working days.

For further details regarding the company’s execution of orders please refer to the Order Execution Policy that forms an integral part of the service agreement.