Last updated: 2026-02-22
The Margin System is a financial mechanism in which the buyer (client) pays only a small portion
of the total value of the asset they wish to purchase. This portion is referred to as the margin.
The remaining balance is then provided by an intermediary — whether a bank or another
licensed financial institution — in the form of a loan.
Under this arrangement, the purchased contracts or assets remain held by the intermediary as
collateral, securing the outstanding loan amount until the client fulfills their full financial
obligation.
The lower the Margin Rate, the higher the leverage. For example, a 10% Margin Rate means 1:10 leverage, allowing the borrower to take a position worth ten times their own capital. This gives the borrower greater exposure to the underlying asset relative to their own capital.
The borrowed funds are subject to interest, which the borrower pays to the lender. These interest payments are the primary source of returns for the lender.
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