Risk Management

MARGIN CALL POLICIES

(Based on the risk management regulations of MXV and SFVN at each period)

Initial Margin 
•  All commodity contracts have initial margin requirements to be placed before you can execute a trade. 
• The initial margin applied at MXV is 120% of the initial margin at interconnected foreign commodity exchanges, excluding LME.
• This margin will be calculated using the exchange rate announced by MXV at each point in time.

Margin Requirement
• The minimum margin amount required in the commodity trading account to fulfill obligations in trading, including opening and maintaining positions.
• Margin requirement = Initial margin x Margin coefficient 
• Current margin coefficients applied by MXV are:
o    Corporate clients: 1.0
o    Individual clients: 1.2
 

Maintenance Margin

• It is the minimum margin amount that clients must have in their commodity trading account to maintain open positions.
• If the net value of the trading account decreases below the maintenance margin level, the client will receive a Margin Call notification. The client needs to supplement the margin to the required margin level.
• Currently, MXV is applying a maintenance margin level equal to 100% of the margin requirement.
 

Cancellation level of pending orders

• Currently, the cancellation level for pending orders in the trading account is set at 70% of the total margin requirement.
• Violation of this margin level, the client's pending orders will be canceled entirely to ensure margin safety.
 

Required position settlement level
• The mandatory position liquidation level of the trading account is set at 40% of the total margin requirement.
• Breaching this level requires clients to supplement the margin within 30 minutes, or the trading account will undergo mandatory position liquidation.