Margin maintenance is monitored in real time to ensure that the maximum risk does not exceed the account balance.
The dynamic leverage of your trading account will vary depending on the margin used to trade and the amount deposited, as well as the valuation gain or loss. This means that as the volume of trades increases, the margin requirement increases in proportion to the dynamic leverage of each instrument.
SvoFX allows you to monitor your risk exposure in real time by monitoring margin usage and margin surplus.
The combination of working capital and surplus margin is the effective margin of the account. Working margin is the money that needs to be held as a deposit in order to execute a trade. (For example, with 100x leverage, you must maintain 1% of the trade amount as margin requirements. Margin is the balance available to take additional positions or to absorb losses, which may vary depending on the trading conditions.
Although it is your responsibility to monitor the movement of your trading account, SvoFX follows a policy of margin calls to ensure that the maximum possible risk does not exceed the total value of your account.
If the margin maintenance rate of an account is below the company’s stated level, we will make a margin call to warn you that there are not enough funds to maintain the open positions.
The loss-cut level is the margin maintenance rate at which a position is automatically settled. If the margin maintenance rate of an account falls below the Company’s stated level, a loss-cut will be executed to automatically close the open positions.
In the unlikely event that the loss-cut does not occur in time and the loss exceeds the margin and becomes negative, the account balance is reduced to zero so that no additional margin is required.
When a position is closed with a negative balance, an automatic reset system is employed that resets the position immediately. No application or procedure for zero-cut is required.
The “Zero Cut/Zero Reset System” with no additional margin completely protects you from the risk of losing more than the amount of your deposit.
Profitability and Optimality
Optimally balanced and sound leverage to maximize profitability
Leverage allows you to trade a position that is greater than or equal to your account balance. Leverage is expressed in ratios such as 10:1 (10x), 50:1 (50x) and 100:1 (100x). Let’s say you have $1,000 in your trading account. If you want to make a trade on the scale of $100,000 against the yen, you will have a leverage of 100:1.
SvoFX recommends a leverage range of 100x, which is the optimum capital and trading balance for both novice and expert traders, from short term to long term asset management.
In addition to the recommended leverage, the following leverage options are available: 1:1 (1x), 2:1 (2x), 5:1 (5x), 10:1 (10x), 20:1 (20x), 50:1 (50x) for low risk, 200:1 (200x) for profitability, 500:1 (500x), 1,000:1 (1000x) for high leverage, 2,000:1 (2,000x) can be selected.
Risk of Leverage
Leverage can allow you to make a large amount of profit with a relatively small initial investment. On the other hand, without proper risk management, it can increase your losses many times over.
SvoFX offers a leverage range of 1-2000x, but the higher the leverage, the more pressure you put on your margin maintenance and the higher your risk level. We recommend that you plan ahead and trade with plenty of time to spare.
Limit by Equity
Customer risk mitigation restrictions
During international events or contingencies when major market disruptions are expected, we may temporarily limit account leverage in order to reduce the risk of sudden changes in volatility.
We will provide advance notice of any restrictions, but please note that restrictions may be imposed in what we deem to be an emergency.
Note on leverage limits and changes
The maximum leverage of 1-100x can be freely changed, but there are conditions for changing to a higher leverage of 200x or more, so please be sure to check the leverage terms and conditions in the leverage settings of the client portal before using this service.