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Saxo Bank
25 July 2016

New equity rating model

​​On 12th September 2016, Saxo Bank will introduce a simplified equity rating model used to determine the:margin required for trading CFDs an...

​​On 12th September 2016, Saxo Bank will introduce a simplified equity rating model used to determine the:

  • margin required for trading CFDs and stock options
  • values of stock or ETF positions that can be used as collateral for trading margin products such as Forex and CFDs

Margin Categories

The new simplified rating model rates equities into five categories from 1 (low-risk) to 5 (high-risk) stocks.

Rating

Margin

Collateral

1

10%

75%

2

20%

50%

3

40%

25%

4

80%

0%

5

100%

0%

 

The margin requirements for CFD indices will be unaffected by this change.

Stock CFDs

For CFD stocks in category 1, you need to maintain only 10% of the market value of the position as collateral, allowing you to leverage up to 10 times. For CFD stocks in categories 4 you must maintain 80% of the position value. For CFD stocks in 5 you need to maintain the full value of the position as margin.

Stock position as margin collateral

For stocks in category 1, you can use up to 75% of the value of your position as collateral for trading margin products such as FX, CFDs and futures. You cannot use the value of your positions of stocks in categories 4 and 5 as margin collateral.

Continuous re-rating

In addition to the simplification of the categories, from 12th September we will be monitoring and re-rating equities on a continuous daily basis. This means that we can adjust individual stock ratings based on current market events, moving them into more appropriate risk categories. This continuous risk rating is to protect you against over-leveraging positions in stock which have become more risky.

Stocks Options

The margin requirements for short stocks options will be aligned with these new groups.

Current rating shown in the platforms

The current ratings for CFDs and stocks can be seen in the Trading Conditions in the trading platforms.
SaxoTrader

  • the Standard Margin required for CFD stocks can be seen under
    Account > Trading Conditions
    > CFD Stock/Index Instrument List (grouped under exchanges)
  • the Collateral Value for stocks can be seen under
    Account > Trading Conditions > Stock Instrument list (grouped under exchanges)

SaxoTraderGO
The Margin Requirement for CFD stocks and the Collateral Value of stocks can be found under Account > Trading Conditions > Search for stock or CFD