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Effective Risk Management
Forex Trading can generate outstanding returns on limited capital although it is still possible to lose up to your deposit amount. Hirose Financial UK has implemented a Stop-Out Policy to protect your funds.
We would like to explain what it is about.
What is a Stop-Out Policy?
Stop-Out orders are automatically executed to close every outstanding position when a client's account has less equity available than 50% of the margin required to maintain an outstanding position.
※Hirose Financial UK has implemented a Stop-Out Policy to help protect its clients funds.
When your account Equity Level falls below 50% of the Used Margin (Margin Requirement) of your open position, the trading platform will then close all positions automatically and without any prior notice to you.
Equity |
50 % of the Margin Requirement |
|||
|---|---|---|---|---|
Balance |
＜ | The deposit needed to open a position |
= | Auto Stop Out |
You will need sufficient funds in your account if you do not want Stop-Out orders to be implemented. Below 100% of the Margin Requirements you can only make closing trades.
Auto Stop Out (Margin Call)
Hirose Financial UK has implemented a Margin Call Policy to protect its clients from losing more money than the remaining balance in their accounts. Margin calls are automatically executed to close every outstanding position when a client's account has less equity available than margin required to maintain an outstanding position. However, it is important to note that you may be exposed to further loss over and above your initial deposit due to a sudden movement in the underlying price (for example, a change in the underlying price over the weekend) or a time lag in the automatic closure process (for example, no prices are available due to the exotic nature and potential lower liquidity when trading minor or exotic pairs).
When your account Equity Level falls below 50% of the used margin by your open position, the trading platform will then close all positions without any prior notice to you.
When Equity < 50% of Used Margin, all positions will be closed.
Example
1.
Your initial deposit is £1,000.
Your Account status is:
| Balance 1,000 |
Equity 1,000 |
Used Margin 0 |
Usable Margin 0 |
Net PL 0 |
2.
You buy 10 Lots (10,000 units) of EURGBP at 0.87500
The margin reqirement is 3.33%, which is ￡292
Your Account status is now:
| Balance 1,000 |
Equity 1,000 |
Margin 292 |
Free Margin 708 |
Net PL 0 |
3.
EURGBP then falls to 0.7896 after a news announcement creating a loss of ￡854
(0.7896 - 0.87500) x 10,000 = -￡854
Your Account status is now:
| Balance 1,000 |
Equity 146 |
Used Margin 292 |
Usable Margin 0 |
Net PL -854 |
When Equity on an account has decreased to the 50% of the Used Margin, your open positions are now closed out.
Segregation of Client Funds
All Retail Client Funds are segregated from our money. That means that if Hirose Financial became insolvent your funds would be returned to you.
We have client trust accounts with Tier 1 Banks specifically for client funds which means that we cannot comingle your money with our money.
