OANDA Japan Increases Margin Rate for AUD/JPY Trading Pair

In a significant move, OANDA Securities, the Japanese branch of renowned online broker, OANDA Corporation, has declared a change in its trading terms for the AUD/JPY currency pair. The margin rate will increase from 2% to 3% as a result of this modification, as stated on the corporate website. At the start of trade on May 15, 2023, this revised term is supposed to take effect.

The margin requirement, a vital component in forex trading, is essentially the minimum amount a trader needs to maintain an open position in a particular currency pair. An increase in the margin requirement, as is the case here, implies that traders will need to deposit more capital to maintain open positions in the AUD/JPY pair. The revision will apply to both business accounts on the Tokyo and NY servers.

OANDA Japan has issued a cautionary note to its customers who have open positions in the AUD/JPY pair. The company has stated that if these traders continue to hold their positions beyond the market closure on May 13, 2023, they could potentially face a margin call. When the value of the account drops below the required maintenance margin, a broker will often demand that the investor deposit more cash or securities into their account. This is known as a margin call. To make sure that the trader's losses don't go above the capital in their account, this is done.

In order to prevent this from happening, OANDA Japan encourages its traders to either decrease their open positions in advance or make sure they have enough money in their accounts to fulfill the increased margin requirements. This is an essential risk management strategy to prevent losses that could potentially exceed their deposits.

This recent development comes on the heels of another significant change that OANDA Japan introduced a month earlier. From the start of trading on April 3, 2023, the company instituted a maximum open interest for all currency pairs. In addition to this, there were alterations in the maximum open interest for specific stock index CFDs and commodity CFDs.

The term 'open interest' in trading refers to the total number of outstanding derivative contracts, such as options or futures that have not been settled. By introducing a maximum open interest, OANDA Japan aims to limit the risk exposure of its clients and maintain the stability of its trading platform.

About Oanda Japan

Established in 1996, OANDA has a robust track record of offering international trading services. As part of its worldwide operations, OANDA Japan extends a diverse range of trading services to its local clientele.

The Financial Services Agency (FSA) of Japan meticulously regulates the activities of OANDA Japan. The FSA is the premier government body charged with the mission to uphold the stability of Japan's financial system, a responsibility that includes overseeing the banking, securities, exchange, and insurance sectors. As per this regulatory oversight, OANDA Japan is obligated to meet the rigorous financial standards set forth by the FSA. These requirements include maintaining an adequate level of capital and complying with several regulations designed for consumer protection.

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