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Margin calls at Gracex
A margin call is what happens when the amount of equity you hold in your account falls below the margin required to keep your trades open.
What is a margin call?
  • A margin call is a warning that your trades have gone against you and you no longer have enough funds to cover running losses.
  • It’s a notification that you need to take action to avoid your positions being automatically closed by your broker.
Our margin-call process
We aim to follow the process outlined below, and will send margin call notifications wherever possible.
  • 100%
    If your equity drops below 100% of the required margin, you’ll receive a margin call1.
  • 75%
    If your equity to margin ratio drops below 75%, you’ll receive a second margin call1.
  • 50%
    If your equity falls to 50% or less of the margin amount required, our automatic margin close-out process will be initiated.
Our margin-call process
The Scenario

  • Imagine you have $3,500 in your account and you want to go long on Company A with a margin rate of 1:2.

  • One share of Company A is trading at $100, and you plan to buy 50 CFDs.
  • This amounts to $5,000 worth of stock. With a margin rate of 1:2, you need to put down 50%, which is $2,500.

  • The remaining amount is covered by your broker.

  • After this transaction, you will have $1,000 of available funds left in your account.
The Scenario

  • As the price of Company A shares drops to $78, your position's value decreases to $3,900 (50 x $78), resulting in equity of $2,400 ($1,400 remaining on the position plus an additional $1,000 in your account). This gives you an equity-to-margin ratio of 96% ($2,400 / $2,500 x 100), triggering your first margin call since your equity is below the required margin of $2,500.

  • If the share price of Company A continues to decline, lowering your position's value to $3,300, your equity drops to $1,800 ($800 remaining on the position plus the additional $1,000 in your account). This equates to 72% of the required margin, below the second margin call threshold of 75%, prompting another margin call.

  • Should the value of your position fall below $2,750, your equity would fall below 50% of the required margin ($1,250 equity level). In this scenario, our margin close-out process would initiate, resulting in the automatic closure of your positions.
The margin close-out process
When your loss-making positions reach a point where your equity can only cover 50% of those losses, our automatic margin close-out process activates to safeguard you against further losses. This process is mandatory under regulations and cannot be disabled.
The automatic close-out proceeds in the following sequence until your equity exceeds 50% of the margin requirement:

  1. All pending orders are closed.
  2. All open positions with negative Unrealised Profit/Loss (UPL) on active markets are closed.
  3. Any remaining open positions on active markets are closed.
  4. Any remaining positions are closed as soon as their respective markets reopen.
Please note that market timings vary, so a profitable trade may close before a losing one during this process. This structured approach ensures that your exposure is managed efficiently during volatile market conditions.
How to reduce the possibility of receiving a margin call
There are some sensible steps you can take when trading to lessen the possibility of receiving a margin call.
How to reduce the possibility of receiving a margin call
There are some sensible steps you can take when trading to lessen the possibility of receiving a margin call.
  • Avoid over-leveraging
    Make sure there is sufficient equity in your account to act as a buffer if the markets move against you
  • Diversify
    Trade a variety of different asset types to balance out your risk
  • Track
    Keep an eye on market prices, either manually or by using the tools available on our platform such as price alerts and watch lists
  • Manage risk
    Apply stop-losses and take-profits to your positions in order to stay in control of your financial risk
How to protect yourself from a margin close-out
Once you’ve received a margin call, you can take these actions to bring your margin up to 100% of the amount we require.
How to avoid a margin close-out
Once you’ve received a margin call, you can take these actions to bring your margin up to 100% of the amount we require.
Add extra funds to your account
Cancel any pending orders
Close some or all of your open trades

Regarding margin calls, please be aware that we cannot guarantee to notify you when your account is on margin call. It is your responsibility to ensure sufficient funds are maintained in your account at all times to cover your margin requirements. We are not obligated to inform you of margin calls, and any attempt to contact you will be a courtesy notification, which may occur via telephone, email, or text message.

Due to the rapid movements in markets, there may be instances where we are unable to reach you before your positions are closed. For example, if your equity drops from above 100% of the required margin to below 50% in less than five seconds, immediate action may be taken to close your positions without prior communication.

Please note that basic stop-loss orders are not guaranteed and may experience slippage. To ensure an absolute limit on potential losses, you have the option to use guaranteed stop-loss orders, which incur charges if triggered. Details of these charges can be found on our charges and fees page.