ForexTime, or FXTM, the Cyprus-based Forex broker, has just announced a series of cuts to its margin requirements for a raft of contracts for difference (CFDs), making trading with this type of instruments more accessible.
The change affects margins on metal futures, oil futures, commodities and indices. The cuts are steepest for CFDs on Dax – down from 15,710 to 1,500: that's a reduction of more than 10 times, wow! And then, the trimming of margins on CFDs for metals is also drastic: for Gold, the margin falls from 8,800 to 1,000, and for Silver, the margin drops from 12,375 to 1,500.
Ok, so now that we've seen a pile of numbers, let's translate all this into normal terms. The margin is the amount of funds that you should set aside in order to pay for any eventual losses from your CFD position. A higher margin requirement means that you should dedicate more money for paying for eventual losses – and this usually means lower leverage. In the opposite case, when the margin requirement falls (as is the case with FXTM), the trading is cheaper and the trading power (via leverage) rises. Hence, what happened through FXTM's move is that traders with CFDs have greater trading power.
The latest perk for ForexTime's clients comes after a series of initiatives by the broker to lure more traders via improved trading conditions and new services. In September, for example, FXTM launched fixed spread accounts
for those who dislike widening of spreads during news releases and major market developments; last month also saw the introduction of ECN Zero
accounts by the broker, with the accounts offering all of the advantages of ECN execution without any commissions.
If you are considering trading CFDs and are shopping around for the best offer, you may find useful our list
of CFD brokers.
Led by Mr Andrey Dashin, founder of Alpari, ForexTime Ltd is committed to providing the tools and support to ensure maximum performance for traders. ForexTime Ltd will offer trading and other investment services in Forex, commodities, precious metals, shares, indices and other financial instruments.