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Margin

Margin

Margin refers to the funds that investors must deposit as collateral with a broker before engaging in trading activities. There are three main distinct types of margins: initial margin, maintenance margin, and force close

margin. Once the order is matched, the broker calculates the investor's daily profit and loss, causing fluctuations in the funds available in the investor's account, based on daily price movements in futures and options.

force close margin. Once the order is matched, the broker calculates the investor's daily profit and loss, causing fluctuations in the funds available in the investor's account, based on daily price movements in futures and options.

Initial Margin - IM

The initial margin (IM) is the minimum amount of funds that the broker or clearing house requires investors to maintain in their portfolio before opening a trading status.

Maintenance Margin - MM

The maintenance margin (MM) is the minimum remaining balance of the collateral. If the remaining balance falls below this level, the broker requests that the investor deposit more collateral (margin call) to bring the collateral funds back to the level of the initial margin.

Intraday Force Close Margin - FM

The force close margin (FM) occurs when a customer who has been subject to a margin call fails to bring in the required collateral within the specified timeframe. In such instances, the customer is compelled to close the contract status to prevent further losses.

Investors are require to deposit Initial Margin with their respective broker before trading futures contract. Brokers will then calculate the profit and loss and add or subtract funds at the end of day via a processed call Mark-to-Market. As a mutual agreement between brokers and the Futures Industry Club (FI Club), the initial margin for investors will be based on the margin rate as announced by Thailand Clearing House (TCH). The initial margin is set at 1.75 times the maintenance margin for local investors and 1.35 times the maintenance margin for institutional investors.

Check TCH Margin Rate Here