If you are resident outside the EU (EEA) and have opened a margin account with CapTrader, you have the possibility to claim a so-called margin credit. The margin account type is a prerequisite for trading certain types of securities such as futures or CFDs.
On this page, we will use practical examples to show you which positions you should keep an eye on in your account, when there is a risk of liquidation and how you can avert it.
Forced liquidation (margin call)
In case you trade beyond the spending limits and/or the market should develop significantly against your expectations, the trading platform (TWS) will display warning messages as soon as possible liquidations should be imminent. You can find more information about Margin Call here).
Overview of the individual positions
All relevant positions are displayed in the Trader Workstation TWS trading platform (Classic TWS view) in the account window.
Key figures for a forced liquidation
Once you have started margin trading, monitoring the financial margin is essential. You should look at the following positions in the account window to be able to prevent the forced closing of positions by the trading system (margin call).
- Gegenwärtig Überschüssige Liquidität (Current Excess Liquidity) - CEL
- Spezielles Memorandum Konto (Special Memorandum Account) - SMA
- Übernacht Überschüssige Liquidität ( Overnight Excess Liquidity) - OEL
Important minimum limits
- Should be 1.(CEL) and/or 2.(SMA) less than 5 percent des Kontowertes (Netto Liquidations Wert) betragen, so leuchten diese Zeilen yellow.
- Sollte 1.(CEL) und/oder 2.(SMA)einen negative value have, shine these lines red. This is where your depot then incurred a deficit.
Das SMA darf während der regulären Handelszeiteneinen negativen Wert annehmenbut must be positive again by the end of the trading day at 21:50 CET at the latest!
The Current Excess Liquidity (1.) and the Overnight Excess Liquidity (3.) must be positive at all times - otherwise the trading platform will automatically close positions.
Potential situations for compulsory liquidation
- A. Gegenwärtig Überschüssige Liquidität (Current Excess Liquidity) - CEL
As soon as the CEL assumes a value less than zero, the trading system automatically closes positions within 30 minutes. - B. Current Excess Commodity Liquidity
If you have written options and this value becomes less than zero, the trading platform will close option positions within 30 minutes. - C. Spezielles Memorandum Konto (Special Memorandum Account) - SMA
Should the SMA value be less than zero at 21:50 CET, the trading platform will try to close positions until 22:15 CET if the corresponding exchange is still open.
Examples of a margin call
- Possibility 1:
If the total value of the SMA is negative at 21:50 CET, and you Positions in European futures contracts or U.S. equities/options/futures contracts the trading platform will close one or more positions. - Possibility 2:
If the total value of the SMA is negative at 21:50 CET and you only have positions in European shares/options hold, the trading platform close positions at the beginning of the next trading day, as European stock and options exchanges are already closed at 21:50 CET.
D. Gesamte Übernacht Überschüssige Liquidität - OEL
The OEL value must be when you hold positions overnight, 15 minutes before close of trading greater than/equal to zero be. Otherwise, the trading platform will close one or more positions. Thus, this method ensures that your account has the required coverage even overnight and can also meet the corresponding margin requirements.
Important Notice:
Please always keep an eye on your positions in the margin account!
If rows in the account window are highlighted in yellow or red, your account is close to margin requirements or is already in deficit.
In this situation, if necessary, you should adjust your positions and take action before the forced liquidation of positions by the trading system occurs.
