Monday, October 26, 2009

IMPORTANT MESSAGE

On Sunday, November 22, FXCM LTD will be making changes to existing margin requirements for all account holders.

Margin requirements will be increasing, particularly for currency pairs with EUR or GBP as the base currency. FXCM’s experience in Hong Kong, where significantly lower leverage levels (higher margins) are mandated by law, suggests that trading with lower leverage may assist clients in trading more successfully over an extended time period. The new margin requirements are intended to reduce risk by restricting traders from using excessive leverage.

Below, you will see the a comparison of the present USD margin requirements* for some of our most popular currency pairs next to the new USD margin requirements that will take effect on November 22.

NEW MARGIN REQUIREMENTS — USD DENOMINATED ACCOUNTS**

CURRENCY PAIR

CURRENT USD MARGIN*

NEW USD MARGIN

USD/JPY AUD/USD (most USD based pairs)

$50

$50

EUR/USD EUR/JPY (most EUR based pairs)

$50

$80

GBP/USD GBP/JPY (most GBP based pairs)

$50

$85

EXOTIC PAIRS

VARIABLE BY PAIR

VARIABLE BY PAIR

*CURRENT USD MARGIN IS BASED ON AN FXCM LTD 10K STANDARD ACCOUNT WITH 0.5% MARGIN. If you have changed your default margin to be above 0.5%, your NEW margin amounts will be higher. Please consult our FAQs for details.


Based on price fluctuations, all margin requirements are subject to change without notice and will be adjusted up or down in increments of $10 for USD denominated accounts. At present, FXCM does not anticipate that margin requirements will have to be changed more than once a month. Up-to-date margin requirements are and will continue to be displayed in the “Simplified Dealing Rates” window of the trading platform by currency pair.

**VIEW A FULL LIST OF THE NEW MARGIN REQUIREMENTS BY ACCOUNT DENOMINATION

Important Notice

  • All positions and orders established after November 22 will be subject to the above margin requirements.
  • Additionally, open trades and active orders initiated prior to November 22 will also be subject to the new margin requirements.

We recommend watching this video to determine if you have sufficient margin to prevent positions from being liquidated. View Video

Visit our Online Margin Help Center for more detailed information, frequently asked questions, and steps you can take to prepare for this change. Visit Now

Why Lower Leverage Is Important
The combination of high leverage and volatile currencies can be extremely dangerous. Accounts that trade volatile pairs, such as GBP/USD and GBP/JPY, with the maximum amount of leverage tend to have less positive performance. On the other hand, traders that focus on less volatile currency pairs, such as USD/JPY and AUD/USD, and use more conservative leverage may benefit from the reduced risk that accompanies trading on lower leverage. When trading volatile currencies with high leverage, one bad trade can wipe out the profits from many good trades. By trading with less leverage, a trader can reduce the risk of a big drawdown from one bad trade.

If you have specific questions about the new margin requirements, or their effect on your risk management, please do not hesitate to contact us at +0808 234 8789 or e-mail us at info@fxcm.co.uk.

Best regards,

Forex Capital Markets Ltd.
145 Leadenhall Street
2nd Floor Rear
London EC3V 4QT
+0808 234 8789
info@fxcm.co.uk
www.fxcm.co.uk

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