What is Max Margin Utilization rule?

What is Max Margin Utilization?

The Max Margin Utilization is a risk-monitoring rule designed to identify unusually high margin usage.

It looks at margin usage in two ways:

• how much margin is being used on a single trade idea
• how much margin is being used across the whole account

The goal of this rule is to detect oversized exposure, warn traders when margin usage becomes unusually high, and allow our team to review the account when needed.

Why do you have this rule?

This rule exists to identify trading behavior that shows unusually high concentration of margin in one market idea or excessive total margin usage across the account.

If too much of the account’s available margin is tied up in one position idea, or too much is used overall, we want to flag it early and let the trader know that their exposure is higher than our preferred threshold.

What counts as one “trade idea”?

For this rule, a trade idea means all open positions grouped by:

• account
• symbol
• direction

That means:

• all Buy positions on the same symbol are treated as one trade idea
• all Sell positions on the same symbol are treated as another trade idea

For example:

• all open XAUUSD Buy positions are one trade idea
• all open XAUUSD Sell positions are another trade idea

So yes - several positions can still be treated as one single trade idea if they are on the same symbol and in the same direction.

What does the rule actually monitor?

The rule monitors two values:

1. Per trade idea margin usage
   This is the combined used margin of all open positions within the same symbol-and-direction group.
2. Total account margin usage
   This is the total used margin across all open positions in the account.

What are the thresholds on margin utilization?

• Per trade idea threshold 20%
• Total margin usage threshold: 50%

How are the thresholds calculated?

The thresholds are based on the initial account balance.

That means the system uses the account’s starting balance as the denominator when calculating margin utilization.

Example:

• Initial account balance: $100,000
• Per trade idea threshold: 20%
• Total margin usage threshold: 50%

This means:

• one trade idea reaches the threshold at $20,000 used margin
• the total account reaches the threshold at $50,000 used margin

Is this a breach rule?

This rule is used as part of our risk monitoring and enforcement process.

Exceeding the allowed threshold is considered a serious violation of our risk parameters. A breach of this rule may result in account review and may lead to account deactivation.