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Margin Trading & Important Trading Dates

Margin Trading & Important Trading Dates

Learn about Margin Calls, our Low Equity liquidation policy and important dates to note when trading

Your account will be considered to have fallen into low equity when the account’s equity balance is less than 50% of the initial margin of all open positions held in the account. While not legally obligated, we will do our best to notify you of the low equity status. To address the low equity, you will have to top up your account with funds or liquidate your positions before the account’s equity balance reaches 20% of the initial margin.

After you have topped up your account, do notify Phillip Futures via email to pfpl_risk@phillip.com.sg and attach the proof of transaction for verification. This ensures that we are updated of your top-up and do not have to liquidate your positions partially or in full, without prior notice, when your equity balance falls below 20% of initial margin.

 

In the event that your positions are liquidated and/or when a stop loss is placed on your behalf, your trading system will be temporarily disabled to prevent duplication of trades.

While liquidation is carried out on a best-efforts basis, it is dependent on prevailing market conditions and market prices. Due to the risks associated with margin/leveraged trading, there may be a deficit in your account after the liquidation.

Customers are encouraged to practise good risk management by taking proactive steps to cope with volatile market conditions and uncertainties.

If you have not topped up your account and/or have not reduced your position(s), in the event your equity balance reaches 20% of Initial Margin, Phillip Futures will be liquidating all your open position(s) on your behalf. Partial liquidation may be carried out if the contract is closed for trading and/or there’s insufficient liquidity in the market place.

If you have position(s) which is benchmarked across different exchanges/time zone, Phillip Futures may use the prevailing market price of a similar contract to assess your portfolio. (For e.g. if prices for Nikkei 225 contract from Exchange A is unavailable, a similar contract from Exchange B may be used).

Liquidation of your position(s) will be carried out at Phillip Futures reasonable discretion and without notice.

 

 

 

 

A margin in the Futures/Forex market is the amount you would have to deposit to take up a trading position. The amount is usually a fraction of the underlying asset value, and it helps ensure that both parties fulfil their obligations. Both buyers and sellers must put up margin payments.

Trading with margin creates a leveraged effect that allows you to use a small amount of capital to make an investment of greater value. Therefore, a small price change can result in larger profits or losses.

If you are an existing customer, you can view the latest margin list from POEMS (log in to your account) → Futures or Forex/Gold → Attention.

Alternatively, you may approach our Marketing Desk at the Main Office or Investor Centres during operating hours for the latest margin list. You can also contact the Marketing Desk at (65) 6538 0500 or email futures@phillip.com.sg for the margin requirements.

 

The  margin requirements are determined by benchmarking the margins required by respective exchanges, counterparties or any relevant bodies. Phillip Futures may adjust to a  higher margin requirement without notice.   

The Initial Margin refers to the minimum amount that you would have to deposit for each open position.

Maintenance or Call Margin refers to the minimum amount which is to be maintained in your trading account following the deposit for the initial margins. 

A Margin Call occurs when your Equity Balance falls below the total Maintenance Margin (MM) level. The under-margined amount is the difference between your Equity Balance and Initial Margins

In determining Margin Calls, your account shall be reviewed at the close of the business day.

You will be notified to top up the under-margined amount (Margin Call amount) on T+1 and is required to fulfil the Margin Call within T+2.

To fulfil the Margin Call, you are required to deposit sufficient funds or liquidate open positions, to ensure that your account’s Equity Balance is above the Initial Margin (IM) requirements at the close of the business day.

Please refer to the table below for the timeline of a Margin Call during normal market conditions:

Trade Date (T) Margin Call occurs
T+ 1 Business Day Notification of Margin Call
T+ 2 Business Day To fulfil Margin Call by T+2*

 

*Depending on the open position(s), you are required to top up the higher Margin Call amount and/or liquidate sufficient open position(s) by the specified time.

It is a trader’s responsibility to continuously monitor and ensure there is sufficient margin on the account on a regular basis. When margin requirements are not met by T+2, Phillip Futures reserves the right to close any position(s) without prior notice.

However, if you have an open position in a contract that is on last trading day and will be cash settled the next day, the Margin Call needs to be fulfilled by  T+1.If you are unable to top-up the account by the specified time, Phillip Futures reserves the right to liquidate your position(s) without further notice in our attempt to bring your Equity Balance above the Initial Margin level.

Under adverse market conditions, you are advised to top up your account almost immediately. For more details, click here to refer to our Low Equity Policy.

While we try our best to prevent your account from going into over loss, it may be inevitable under extreme market conditions.