1. Purpose and scope
Markets close at the end of the trading week and reopen at a price set by whatever has happened while they were shut. Between those two moments there is no opportunity to trade, adjust or close a position.
This Policy explains how the Company monitors accounts ahead of that closure, what it will ask of you, and what it may do if you do not act.
It forms part of, and must be read together with, the Client Agreement (Terms of Business), the Risk Disclosure and the Negative Balance Protection Policy. The steps described in Section 6 are taken under the Client Agreement's margin clause, which permits them wherever the Company considers an account's risk to warrant it — a weekend being the most common occasion, but not the only one. Where this Policy and the Client Agreement conflict, the Client Agreement prevails.
2. Why weekend exposure is treated separately
When a market reopens, it can do so at a price materially different from the last traded price — a "gap". A position that appeared adequately funded at the close can be through its stop-out level at the reopen, and may be closed at a price well beyond it. Because the market is shut in between, neither you nor the Company can act while the move is happening.
Instruments prone to weekend gapping include, without limitation, precious metals, energy products, stock index instruments, cryptocurrencies and instruments affected by scheduled or unscheduled news occurring outside trading hours. This is a characteristic of the instruments, not a defect in the Company's platform or pricing.
3. Pre-weekend monitoring
Before the weekly close, the Company reviews open client accounts and identifies those whose free margin is low relative to the margin committed to their open positions.
The Company applies a threshold to that ratio, currently 50% — that is, an account is identified where its free margin is less than half of the margin supporting its open positions. The Company may vary this threshold, and may apply different thresholds to different instruments, account types or clients, at its discretion and without prior notice.
Accounts with no open positions are not affected by this Policy. The Company may also disregard accounts whose committed margin is below a minimum level, on the basis that the ratio is not meaningful at very small sizes.
This monitoring is a precaution operated for the Company's own risk management. It is not a service provided to you, it is not continuous, and you must not rely on it. The Company does not undertake to identify every account at risk, to contact you, or to contact you within any particular time. The absence of a notice does not mean your account is adequately funded, and does not relieve you of your obligation to manage it.
4. Notice
Where an account is identified, the Company may send a notice to the email address registered on the account. That notice will set out the account's margin position, the amount required to bring it back above the threshold, and the time by which you are asked to act.
Notices are sent to the registered address only. It is your responsibility to keep your contact details current and to monitor them.
5. What you are asked to do
On receiving a notice you may:
- deposit sufficient funds to bring your free margin back above the applicable threshold — the notice will state the amount; or
- reduce your open positions, closing enough exposure that the margin required falls accordingly.
You are asked to act by 45 minutes before the weekly close. Deposits must be credited to the account by that time; a transfer initiated but not yet received does not satisfy the requirement.
You may of course take either step at any time, whether or not you receive a notice.
6. What the Company may do
Where an account remains below the applicable threshold at the deadline, the Company may, at its sole discretion and without further notice, take any of the following steps:
- Hedge the open exposure. The Company may open one or more positions on
your account in the opposite direction to your existing positions, so that the
account's net exposure to a weekend gap is reduced or removed. Where the
Company does so:
- the hedging position is opened on your account and forms part of it;
- margin is charged on the larger of the two offsetting positions, not on both, except where the Company determines that hedging is being used to manipulate margin requirements;
- normal spreads, commissions and financing charges apply to the hedging position as they would to any other; and
- once markets reopen you may close either side, or both, and resume trading normally. The Company does not undertake to close the hedge for you, and it will remain open, incurring any applicable charges, until it is closed.
- Reduce or close open positions, in whole or in part, at prices reasonably available to the Company.
- Increase the margin required on some or all instruments, account types or groups, which may itself result in positions being closed automatically.
- Restrict the opening of new positions on the account.
These steps protect the Company against the risk of an unrecoverable debit balance, and in doing so they also reduce the likelihood of your account being left owing an amount it cannot cover — whether that arises from positions carried into a closure that the account's equity cannot support, or from any other cause.
That shared benefit does not make them a service to you. They are not taken on your behalf, they are not advice, and the Company does not undertake to take any of them. The fact that it has done so on one occasion does not oblige it to do so on another, and you must not rely on them.
7. Outcomes and responsibility
Any action taken under Section 6 fixes your position at the prices then available. You accept that:
- an intervention may result in a worse outcome than taking no action, including where the market subsequently moves in your favour;
- a hedge removes both the further loss and the further gain on the hedged exposure;
- the Company gives no assurance as to the price at which any hedging or closing position is executed; and
- to the maximum extent permitted by applicable law, the Company is not liable for any loss, cost or lost opportunity arising from taking, or from not taking, any step described in this Policy.
Responsibility for maintaining sufficient margin, and for the consequences of your open positions, remains yours at all times.
8. Relationship with negative balance protection
The measures in this Policy are among the steps referred to in the Negative Balance Protection Policy as being taken in advance to reduce the likelihood of a negative balance. They do not extend the protection given there, and a negative balance arising despite them remains subject to that Policy — including your liability for any shortfall above the stated threshold.
9. Changes to this Policy
The Company may amend this Policy at any time by publishing an updated version on its website. The version published at the time of the relevant event applies.