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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

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.

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

http://www.phillipfutures.com.sg/component/fsf/?view=faq&catid=6&faqid=45

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

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.

A Margin Call may only be reduced/extinguished by the full amount received (through any of the acceptable forms of margin).  Failing which, Phillip Futures will perform liquidation on your behalf to bring their equity balance above Initial Margin.

An example is shown below:

Assuming that

- On end of business day Monday, there is a Margin Call of $10,000

- On Tuesday (T+1),   you will be notified for a 1st day Margin Call for $10,000

By the end of Business day on Tuesday, there is a top-up of $5,000

-On Wednesday (T+2), you will be notified for a last day Margin Call for $5,000 

 

Monday(T)

Tuesday(T+1)

Wednesday(T+2)

Equity Balance

$50,000

$50,000

$55,000

Initial Margins

$60,000

$60,000

$60,000

Maintenance Margins

$55,000

$55,000

$55,000

Under-Margined

$10,000

$10,000

$5,000

Funds Received

NIL

$5,000

NIL

Margin Call Amount Required

$10,000

$5,000

$5,000

Is my Margin call extinguished  

Margin Call of $10,000 was reduced by fund deposit of $5,000 but not extinguished as there’s a higher call amount of $10,000 from T+1

If there is no fund receipt for outstanding call amount of $5,000; you are required to liquidate sufficient open position(s) to bring the account’s equity balance above Initial Margin by the specified time. 

 

You can refer to FAQ on Funds Deposit & Withdrawal for more details on how you can proceed to top-up your account.

After a top-up, do inform Phillip Futures via an email to pfpl_risk@phillip.com.sg with proof of transaction or transfer.

This ensures that we are updated of your top-up and do not have to liquidate your open position(s) partially or in full, without prior notice, to fulfil Margin Call requirement or/and to rectify any low equity situation.