Recent Volatility Causes Forex Margin Increases


By Darrell Martin

All markets have seen volatility lately. Because of this, the Commodity, Futures Trading Commission (CFTC) along with the National Futures Association (NFA), the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE) have all increased margins.

The effective date for many of these margin increases is December 5, 2016. ICE will increase margin requirements on all Russell markets. Since CME and ICE implemented margin increases, the NFA will increase its required minimum security deposits in regards to the Mexican peso, Japanese yen and New Zealand dollar. The new requirements are as follows:

  • Mexican peso 8%

  • Japanese yen 4%

  • New Zealand dollar 3%

The increases will happen at 5:00 PM CST and remain in effect until further notice. NFA announced one decrease as well. CME and ICE reduced the required minimum security deposit for currency pairs involving the Swiss franc, so NFA will equally lower its requirement to three percent, down from five percent. This change goes into effect at 5:00 PM CST December 5, 2016 with the same qualification of being in effect until further notice.

All Forex brokers in the US are also following the guidelines being set forth by the NFA, CFTC and others. TD Ameritrade notified their clients of the upcoming increase. They warn that if the trader wants to trade in the markets listed below, “please ensure that your account has adequate available funds to meet the higher requirements. If you do not have the available funds to hold a position, the standard auto liquidation policy will apply.”

Rather than trying to stay on top of all of these changes and worrying about having enough money in your margin account, it is possible to trade with Nadex. Risk is defined up front and is capped, making margin calls unnecessary.

Before a trade is entered, you know the profit and loss potential. It is also possible to exit the trade early to cut your losses and protect your profits.

Nadex offers binary options as well as spread trading. If you are new to trading, you can open a demo account where you can learn without risking real money. When you are ready to start trading live, you can open a live account with as little as $250.

Apex Investing offers free training for learning how to trade with Nadex or any other instrument you choose.