Common use of Initial Margin Clause in Contracts

Initial Margin. Initial Margin is the amount debited from the Client account as soon as a new position is opened or an order is placed to open a new position. This acts as a security buffer and protects us in the event of Client default. Typically MTC will require an Initial Margin calculated as a percentage of the contract value. The Initial Margin will vary depending on the Contact traded. The initial margin is determined at MTC’s discretion mostly by the liquidity of the underlying asset on which the product is based. Once the Client is trading, the daily statement will show the Margin requirement for each trade as well as the Total Margin Requirement i.e. combined Margins of all Contracts. MTC advises the Initial Margin rates on the website and electronic trading platform. Initial margin is debited from a Client account should the Client place an order which is not executed. This margin remains debited from the Client’s account while the order remains on the market in anticipation of the order being filled. If the order is not subsequently filled the initial margin is credited to the Client’s account when the Client cancels the Order. Should the Order be filled the amount of the initial margin will remain debited and will be returned immediately once the position is closed.