A Division of
Commodity Futures & Options Service, Inc.
FOREX BROKER / COMMODITY FUTURES BROKER
/ OTC METALS BROKER
Investment
Opportunities in Global Commodity Markets Since 1988
Live Chat M-F 7am-4pm CST
or
Contact Us offline
24hrs/day
| GETTING STARTED |
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| NEW AT CFOS/FX |
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| OTHER SERVICES |
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| CONTACT CFOS/FX |
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Telephone: |
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Toll-Free: 877-423-6739 |
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(U.S. & Canada) |
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International: 713-622-7774 |
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Mailing Address: |
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CFOS/FX |
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2425 W. Loop South, Ste 601 |
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Houston, TX 77027 USA. |
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Fax: 713-439-0045 |
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Email: info@cfosfx.com |
We broker commodity futures, broker forex spot, broker forex options and broker OTC metals. For all of your online forex broker, online forex options broker, online OTC spot gold broker, online OTC spot silver broker and online commodity futures broker needs you only need one broker - CFOS/FX. All of the professional brokers at CFOS/FX are licensed by the National Futures Association and are qualified to provide you with the following services: forex broker, forex options broker, commodity futures broker, commodity options on futures broker, OTC spot metals broker, OTC spot metals options broker and forex and futures consulting. Commodity Futures and Options Service, Inc. is located in Houston, Texas. CFOS/FX provides both online and telephone brokerage services to retail and commercial clients. Customer satisfaction is our top priority and we look forward to having you as our client.
HOW FOREX MARGINS WORK
*Margin policies may differ by dealer, and the information on this webpage should be used for informative purposes only. Please contact CFOS/FX for dealer specific margin information.
Margins are equity deposits that ensure the credit-worthiness of both parties of a forex contract. "Initial Margin" is the term used to describe the minimum equity amount that must initially be in a client's forex trading account to open a long or short position in the forex market. Once a forex position is open, it is acceptable if the client's forex trading account balance drops below the initial margin requirement. However, the forex trading account balance must remain above the "Maintenance Margin" requirement. The "Maintenance Margin" is the minimum equity amount a forex client must have in his or her account before a "Margin Call" is generated. A "Margin Call" is a request from a forex broker or forex dealer for additional client funds to further guarantee performance on a forex position that has moved against the client. At the discretion of the FCMs, maintenance margin rates may be increased from time to time, especially before a weekend or holiday, to account for unexpected price volatility that can occur while the foreign exchange markets are closed.
Also, please note that margin calculations will vary for direct rates, indirect rates and cross-rates. If you need additional information, please contact us.
Please click on the appropriate link for
more information:
**Leveraged
trading can lead to potentially large losses as well as gains. Please read our Risk Disclosure for detailed information.
CFOS/FX clients can utilize leverage of up to 200:1 in the forex spot market
(depending on which type of account you open). This simply means
that an investor can leverage a spot forex contract worth $10,000 with an
initial margin requirement of only $50. Margin
requirements will vary by FCM. Any or all positions in a trader's account
may be closed if the trader's account balance falls below the maintenance
margin (margin call level) and the client fails to immediately satisfy a margin call via wire
transfer.
Forex spot
margins are
calculated as follows (assuming 100:1 leverage):
contract size X
.01 X
spot rate = initial margin requirement
For example, to buy or sell 100,000 EUR/USD
at 1.1705 the initial margin requirement would be calculated as follows:
$100,000 (contract size) X .01 (100:1
leverage) X 1.1705 (spot rate) = $1,170.50
(initial margin requirement)
Please feel free to contact us
to discuss the nature of leverage and margins to ensure
your complete understanding of the leveraged nature of forex trading and/or view
our forex risk disclosures.
**Leveraged
trading can lead to potentially large losses as well as gains. Please read our Risk Disclosure for detailed information.
Since each online forex trading platform
offered through CFOS/FX is based on leveraged products, each transaction requires a margin
deposit that ensures credit-worthiness. Minimum allowable margin levels
are set by the National Futures Association. The actual margin levels
and policies are
outlined in the account opening documentation and are the
decisions of each forex FCM's credit committee.
Selling a forex option contract
requires the seller to meet initial margin requirements. Forex option
margins are delta-based (using the standard 2% spot margin requirement) and are
generally calculated as follows:
option contract size X option delta X 2% X
spot rate = initial forex option margin requirement
For example, if the EUR/USD is trading at
1.1705 and the respective at-the-money EUR/USD 1.1700 call has a delta
of .5, the initial margin requirement would be calculated as follows:
$100,000 (contract size) X .5 (option delta) X 2%
X 1.1705 (spot rate) = $1,170.50
(initial margin requirement)
For Core Options trading platform users,
forex option deltas are listed alongside the
streaming quotes on the forex options online trading platform. In rare
instances when market volatility is extremely high,
an in-the-money option's delta may go slightly above 1.0. As can be easily calculated,
about a 2% initial margin requirement per forex option
contract is the most you will be required to post.
Buying a forex option contract requires
the buyer to pay an option premium to the seller. Please note
that, depending on the dealer, you may be required to post a nominal margin (in addition to the premium
paid) to purchase options if you are also trading spot contracts from the same
account or if you may also be short-selling option positions. However,
if you will only be purchasing options to open positions (i.e. you will not be
trading spot in the same account and will not be short-selling options) then
the FCM can disable the nominal margin application for purchasing
options, and you will no longer be required to post a nominal margin - this is only done for traders who purchase
options (to open) exclusively.
*CROSS-MARGINING: Please note that both
spot and options positions are cross-margined (risk from all open positions is totaled
into one aggregate margin amount).
At the discretion of the forex FCMs,
maintenance margin rates may be increased from time to time, especially before
a weekend or holiday, to account for unexpected price volatility that can
occur while the forex markets are closed.
Please feel free to contact us
to discuss the nature of leverage and margins to ensure
your complete understanding of the leveraged nature of forex trading and/or view
our forex risk disclosures. As permitted within the scope of National Futures
Association (NFA) and Commodity Futures Trading Commission (CFTC) regulations,
the dealer may, at its own discretion, close any or all open positions in a
forex trader's account in the event that his or her forex trading account balance falls below the
margin call. At the discretion of the FCMs,
margin rates may be increased from time to time, especially before a
weekend or holiday, to account for unexpected price volatility that can occur
while the forex markets are closed. It is the customer's responsibility to monitor and
maintain his or her margin account balances at all times. You may keep
track of your equity and usable margin from the online forex trading platforms.
Margin policies are further explained in the respective FCM Trading
Agreement. *Disclaimer: Foreign exchange trading, foreign exchange investments and
commodity futures trading and investments are not suitable for
everyone. Forex trading and commodity futures trading carry a high level of
risk and the possibility exists that you could sustain a loss of
all or more of your currency trading or commodity futures trading investment. Before you decide to trade
foreign currency options, trade foreign currency spot markets or trade commodity
futures you should be aware of all
risks associated with currency trading and futures trading. If you
would like more information about the risks of forex trading, commodity futures
trading and of online forex trading and online futures trading, please
contact a CFOS/FX futures and forex broker to discuss online foreign currency trading risks
and/or commodity futures trading risks in
detail.
CFOS/FX is a futures and forex broker offering online forex trading platforms in both spot forex and forex option trading markets as wells as OTC spot gold, OTC spot silver and commodity futures. The professionals at CFOS/FX broker forex spot contracts and broker forex option trading for both individual and commercial futures and forex clientele. CFOS/FX, as an entity, acts only as a futures and forex brokerage and does not actively manage futures or foreign currency trading accounts for clients. Regarding forex markets, CFOS/FX is a forex option broker and a spot forex broker acting an the Introducing Broker; CFOS/FX does not act as counter-party for client forex trading or forex option trading.