What are OANDA's margin rules?

OANDA provides online ‘trading with leverage’ services, meaning that you can enter into positions larger than your account balance and trade without depositing the full value of your position in advance. One of the benefits of trading with leverage is that you could potentially generate large profits relative to the amount invested. On the other hand, trading with leverage could also result in significant, rapid losses to your capital. To open a position on your OANDA account, you need to have sufficient funds available to cover margin.

OANDA takes a form of security (or deposit) against any losses that you may incur when you trade using leverage. This collateral is typically referred to as margin. Although there is no minimum deposit needed to open an OANDA account, the funds available in your account will limit the size of the position(s) that you can open.

The margin required to open each position is derived from the leverage ratio associated with the asset class that you wish to trade. For example, if you were trading an instrument with leverage at 30:1, you would be asked to deposit a margin of 3.3% of the full value of the trade that you wish to enter into (1 over 30 is 0.03 or 3.3%). In other words, when trading with a leverage of 30:1, you can open a 30 USD trade for each dollar of available funds to cover margin on your account.

Different asset classes have different leverage levels, which also means they have different margin rates. You can find a list of margin rates applicable to each asset class on the OANDA margin rates page.

To keep a position open, you must maintain a minimum amount of money in your account. This is known as the margin requirement. The margin requirement is 50% of the margin needed to open the position. You are required to maintain this margin requirement on your account. If the funds in your account fall below the margin requirement, then your position(s) may be closed. This is known as margin closeout.

The margin requirement is 50% of the margin needed to open the position based on prevailing prices. That is why it is dynamic, not fixed.

The MarginClosedThe required collateral to open and maintain a leveraged position. Closeout Percent field on your v20 sub-account indicates how near your positions are to margin closeout. The closer the Margin Closeout Percent is to 100%, the closer you are to a margin closeout. A Margin Call is triggered when the Margin Closeout Percentage rises to 50%. Bear in mind that in fast-moving markets, there may be little or no time to warn you about imminent margin closeout. For more detailed information about Margin calculations, refer to this topic.

When margin closeout occurs on v20 (and MT4/v20) accounts, all of your open positions will be closed.

If trading is unavailable for certain open positions at the time of the margin closeout, those positions will remain open and OANDA will continue to monitor your account funds in relation to margin requirement. When the markets reopen for those remaining positions, they will be subject to margin closeout if the funds in your sub-account remain below the margin requirement.

  1. Margin requirements are checked at 3:45 p.m. ET, and a notification email is sent out on a best-effort basis. Even if the account meets the margin requirement during the day but falls short at 3:45 p.m. ET, the account will be considered under-margined.

  2. When an account remains under-margined for 2 consecutive trading days, all open positions will be automatically closed using the current OANDA rates at the time of closing. If trading is unavailable for certain open positions at this time, they will be automatically closed using the current OANDA rates when the markets for those instruments re-open. For example, if your account remains under-margined, starting on Monday at 3:45 p.m, an automatic margin closeout will occur on Wednesday at 3:45 p.m. unless a margin closeout occurs earlier due to the NAV declining to half, or less than half, of the Margin Used. Saturday and Sunday do not count towards the two consecutive days as trading is not available on weekends. If the account recovers before the end of 2 consecutive trading days by meeting the margin requirements at the 3:45 PM ET daily margin check, a new count will start again from the day the account falls below margin requirements again. For example, if your account is under-margined on Monday at 3:45 p.m., recovers and is adequately margined on Tuesday at 3:45 p.m., and then falls below margin requirements again on Wednesday at 3:45 p.m. and continuously remains under-margined, a margin closeout will occur 2 days later on Friday starting at 3:45 p.m.

You are responsible for monitoring your account to prevent margin closeouts.

The following list shows examples of proactive measures to avoid undergoing margin closeout on your account:

  • Monitor the status of your account continuously.

  • Specify a stop-loss order for each open position to limit downside risk. You can specify the stop-loss level at the time you open a position or add a stop-loss order at a later time once a position is open. You can also change your stop-loss orders at any time to take current market prices or other conditions into consideration.

    Your position is closed at the prevailing OANDA price, which may vary from your stop loss price, when prices are subject to slippage, for example, when trading resumes after periods of market closure, around news announcements, etc.

  • Incrementally reduce the size of your positions as you approach a margin closeout. For example, you could reduce the size of all your open positions by 10%, which would effectively lower the margin needed.

  • Close individual positions to reduce the margin needed.

  • Transfer additional funds into your account. However, the time it takes to add funds could mean your funds arrive too late in the event of continual or swift adverse market movement.

For more information on other related terms, such as NAV, Equity, and UPL, and how they differ across our sub-accounts, refer to our website.