Margin Requirements and Risk Management Policies
Article 1 Policy Purpose
Asia Future Trading (hereinafter referred to as "AFT" or "the Company") is committed to providing customers with a transparent, stable and orderly trading environment.
In view that the financial market may be affected by the release of major economic data, changes in central bank policies, market closures, insufficient liquidity and other unforeseen events, the Company has formulated this "Margin Requirements and Risk Management Policy" to strengthen margin management, reduce risks under extreme market conditions, and clarify the margin management standards for relevant trading accounts.
This policy covers the following three main risk management mechanisms:
1. Higher Margin Requirements (HMR): Increase the margin requirements for related trading products under specific market conditions.
2. Margin Call: When the account margin level reaches or falls below 100%, it enters a margin alert state.
3. Stop-Out: When the account margin level reaches or falls below 50%, the automatic forced liquidation mechanism is triggered.
The above mechanisms are designed to assist in managing trading risks, but cannot guarantee the elimination of all market risks or avoidance of trading losses.
Article 2 Margin Management Standards
2.1 Margin levels
The account margin level (Margin Level) is calculated according to the following formula:
Margin Level = Equity ÷ Used Margin × 100%
Among them:
Equity (account equity): Account balance plus or minus floating profits and losses and other items included in the account equity.
Used Margin: The margin used to maintain the current position.
Margin Level: Used to measure the ratio of account equity relative to used margin.
When the account has no used margin, the above percentage calculation method does not apply.
2.2 Unified margin management standards
The company adopts the following margin risk management standards for applicable trading accounts:
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Margin Call and Stop-Out levels apply to trading accounts covered by this policy.
If a specific account or product is subject to different mandatory regulatory requirements, applicable laws and regulations and officially announced trading conditions shall prevail.
Article 3 Margin Call — Margin warning
When an account's margin level reaches or falls below 100%, the account will enter Margin Call status.
In this case, customers should promptly assess account risks and consider taking appropriate measures, such as:
1. Replenish account funds.
2. Reduce existing positions.
3. Close some or all positions.
4. Reduce the overall risk exposure of the account.
Margin Call is an account margin risk warning mechanism and does not mean that the system will automatically close positions at this level.
The company may send relevant risk warnings to customers through the trading platform, customer backend, email or other official channels.
Customers should note that market prices can change rapidly. The Company does not guarantee that customers will be able to receive, read or respond to relevant risk notifications in a timely manner before triggering forced liquidation.
It is the client's responsibility to continuously monitor account margin levels.
Article 4 Stop-Out — Forced liquidation
4.1 Forced liquidation level
When the account margin level reaches or falls below 50%, the trading system will automatically initiate a Stop-Out (forced liquidation) procedure in accordance with the applicable trading account rules.
4.2 Execution of forced liquidation
After Stop-Out fires:
1. The trading system may automatically close some or all of the customer's positions.
2. Forced liquidation does not require additional confirmation from the customer.
3. The system will process the liquidation in accordance with the applicable trading rules and the prevailing market execution conditions.
4. The actual transaction price may be different from the market price when Stop-Out is triggered.
5. Forced liquidation may be executed continuously until the system’s conditions for stopping forced liquidation are met or all relevant positions are closed.
4.3 Risk of forced liquidation
Customers should note:
- 50% is the trigger level for forced liquidation, which does not mean that liquidation is guaranteed to be completed at this level.
- Extreme market conditions may cause price gaps or slippage.
- Insufficient market liquidity may affect order execution.
- Stop-Out does not guarantee that customers will not incur greater than expected trading losses.
- If there is a negative balance in the account, it will be handled in accordance with the applicable customer agreement, negative balance protection policy and relevant laws and regulations.
4.4 Application of new standards
From the official effective date of this policy, Margin Call 100% and Stop-Out 50% will apply to trading accounts covered by this policy, including accounts that still hold open orders when it takes effect.
If a customer's account has reached or fallen below the new Stop-Out level when the policy takes effect, the system may immediately initiate a forced liquidation procedure.
Clients should check the account margin level before the policy takes effect and take necessary risk management measures.
Article 5 Higher Margin Requirements (HMR)
5.1 HMR definition
Higher Margin Requirements (HMR) refers to the company temporarily increasing the margin requirements of related trading products under specific market conditions to limit trading leverage and new risk exposures during the relevant period.
HMR may start under the following circumstances:
1. Before and after the release of major economic data.
2. During the central bank’s interest rate decisions and important monetary policy announcements.
3. Before and after the market closes during daily trading sessions.
4. During weekend market closing and reopening periods.
5. Market holidays and special trading periods.
6. The market experiences abnormal fluctuations or insufficient liquidity.
7. Other situations that may have a significant impact on market stability and transaction execution.
5.2 Principles of application of HMR
While HMR is in effect, margin requirements for related products may be higher than during normal trading hours.
The maximum allowable leverage during the HMR period will not be higher than the original leverage of the customer account and the leverage limit of the related product itself.
For example:
The leverage on client accounts is 1:1000.
If the maximum leverage of XAUUSD during the HMR period is 1:100, the applicable margin will be calculated based on a leverage of no higher than 1:100 for the relevant newly opened transactions.
If the customer's original account leverage is 1:100, the lower leverage of 1:100 will continue to apply.
Article 6 HMR Products and Margin Requirements
The company sets HMR margin standards for different types of trading products based on product characteristics, market fluctuations and liquidity conditions.
6.1 HMR product classification
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6.2 Product margin calculation
For products using the standard notional principal calculation:
Required margin = Transaction nominal principal ÷ Applicable leverage
The actual margin amount may be affected by contract specifications, transaction volume, market price, margin currency, exchange rate conversion and product margin calculation methods.
6.3 Special products
Some trading products may have independent margin requirements.
If the original margin requirements for a specific product are higher than the HMR standards listed in this policy, the higher margin requirements will continue to apply.
The actual trading conditions are subject to the relevant product specifications and applicable margin rules officially announced by the company.
Article 7 Major Economic Events HMR
7.1 Applicable events
The Company may implement HMR on related products before and after the release of economic data and policy events that have significant market impact.
Major events include:
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7.2 News HMR time
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For example:
A major piece of economic data is scheduled to be released at 20:30 trading server time.
If the HMR rules for general major economic data apply, then:
HMR starts: 20:15
HMR ends: 20:35
During this period, HMR margin requirements will apply to newly opened trades on the affected products.
7.3 Special events
If the release time of economic events is adjusted, or there are continuing risks in related events, the company may adjust the HMR time based on actual market conditions.
For unscheduled major events, the company may take temporary margin adjustment measures.
Article 8 Daily market closing, weekends and holidays HMR
8.1 The market is closed daily
For products with daily trading suspension periods, the Company may implement HMR before and after the market closes.
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8.2 Market closed on weekends
For products with weekend closing arrangements:
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8.3 Market holidays
During market holidays, early market closures or special trading schedules, the Company may impose additional margin requirements.
Relevant arrangements will be determined based on specific products and market conditions.
8.4 24/7 trading products
For products with a 24/7 trading schedule, weekend HMRs that are triggered solely because traditional markets are closed on weekends do not apply.
However, the above products may still be subject to HMR restrictions due to major economic events, abnormal market fluctuations and other risk factors.
Article 9 The impact of HMR on existing positions and trading orders
9.1 New position opening
While HMR is in effect, new open orders for the affected products must meet the corresponding HMR margin requirements.
If the account's available margin is insufficient, the relevant opening order may be rejected.
9.2 Existing positions
Under normal HMR conditions, in principle, the Company will not retroactively increase the margin requirements for positions established before HMR takes effect just because the HMR period begins.
However, existing positions may still be affected by market prices, account equity, changes in normal trading conditions, and special risk management measures.
9.3 Increase positions
When adding to existing positions during the HMR period, the new exposure is subject to the then-applicable HMR margin requirements.
9.4 Reduce and close positions
HMR itself will not prevent clients from actively reducing or closing existing positions.
Position closing transactions are still subject to the trading hours, trading status and market execution conditions of the relevant products.
9.5 Pending orders
Pending orders submitted before HMR becomes effective but triggered during HMR may be checked against the margin requirements applicable at the time of triggering.
If the margin is insufficient, the order may not be executed.
9.6 Hedging and hedging
For accounts using hedging mode, the margin requirements will be calculated based on the hedging margin rules of the relevant trading products and the new risk exposure.
9.7 HMR End
After the end of the HMR period, normal margin requirements generally resume for new trade openings.
For positions that have been established during the HMR period, subsequent margin processing will be performed in accordance with the applicable margin calculation rules of the relevant products.
Article 10 Special Market Risk Management
If there are major abnormalities in the market, the Company may take additional risk management measures based on the actual situation.
Including but not limited to:
1. Temporarily increase the margin requirements for designated trading products.
2. Temporarily reduce the maximum trading leverage for designated products.
3. Start early or extend the HMR period.
4. Restrict new opening transactions or new risk exposures for designated products.
5. Adjust the trading conditions of relevant products according to applicable trading rules.
Special risk events include:
- Major unexpected political or economic events.
- Abnormal market fluctuations or price gaps.
- Market liquidity is obviously insufficient.
- The exchange suspended trading or experienced a circuit breaker.
- The main liquidity provider experiences trading or quotation abnormalities.
- Other situations that may have a significant impact on transaction execution and margin management.
The company will determine the duration and lifting conditions of relevant measures based on market risk conditions.
Major margin adjustments involving existing positions will be implemented in accordance with applicable laws and regulations, customer agreements and relevant notification requirements.
Article 11 Customer Notice
The company may publish margin policies and related adjustments through the following official channels:
- AFT official website.
- Customer transaction backend.
- MetaTrader 5 trading platform.
- Customer's registered email address.
- Other official communication channels recognized by the Company.
For foreseeable major adjustments to trading conditions, the Company will notify customers in advance within the time limit stipulated in applicable laws, regulations and customer agreements.
In the event of sudden market events or the need to take immediate risk management measures, the Company may immediately adjust relevant trading conditions within the scope permitted by relevant rules and make reasonable efforts to notify customers in a timely manner.
Customers should proactively pay attention to relevant trading conditions, market events and risk notices.
Article 12 Customer Responsibilities and Risk Warning
All clients should fully understand the risks that may arise from leveraged trading and margin trading.
Customers should:
1. Continuously monitor the account equity and margin level.
2. Make sure the account has sufficient available margin.
3. Understand the margin and leverage requirements of relevant trading products.
4. Pay attention to major economic events and market closing arrangements.
5. Reasonably control the size of positions during periods of high market volatility.
6. Understand the possible trading risks caused by market gaps, slippage and insufficient liquidity.
Customers should pay special attention to:
Margin Call 100% does not mean that the system will force liquidate the position at that level.
Stop-Out 50% does not mean that the company guarantees that the order can be closed at this level.
HMR may increase the opening margin requirements for related products, but does not guarantee that all market risks can be eliminated.
Article 13 Policy Effectiveness and Revision
This policy applies to designated trading accounts and trading products from the effective date officially announced by AFT.
Among them:
- Margin Call Level: 100%.
- Stop-Out Level: 50%.
- HMR: Implemented in accordance with this policy and applicable product margin standards.
The Company may revise this policy based on the market environment, characteristics of trading products, trading system requirements and relevant regulatory regulations.
For major adjustments that require advance notification or customer consent in accordance with applicable laws, regulations or customer agreements, the Company will perform corresponding procedures.
If there is a conflict between this policy and mandatory applicable laws, regulations or regulatory requirements, the relevant laws, regulations and regulatory requirements shall prevail.