Copenhagen-based Retail forex broker Saxo Bank has announced reduced margin requirements for its most popular CFD Index Trackers, which provides greater flexibility during trading hours with most liquidity while maintaining margin at prudent levels.
Initially, the reduced intraday margins will be available on selected CFD Index Trackers on main stock indices in Europe and the US such as US 500, EU 50, GERMANY 30, UK 100, FRANCE 40, SPAIN 35 and SWISS 20.
Saxo’s Intraday Margin will enable clients to reduce their margin requirements during the principal trading hours given the stronger liquidity in the underlying market, while maintaining margin requirements at responsible levels. The Intraday Margins, which accounts for half of the normal margin requirements, is applied during main trading hours and phased out when underlying cash markets are about to close.
Going forward, Saxo intends to offer Intraday Margins on a wider range of CFDs.
Commenting on the launch, Saxo Bank Head of Markets Claus Nielsen said:
We have experienced strong client interest in our CFD Index Tracker offering, and we want to make sure that clients are able to trade flexibly and responsibly taking the liquidity available in the underlying futures and cash markets into account.
In line with our aim to enable clients to access markets as efficiently as possible, our Intraday Margins for CFDs and improved spreads have been designed to provide clients with increased flexibility during the trading day while also ensuring appropriate levels of margin for prudent risk management.
At the same time, Saxo Bank introduces “fixed” spreads on CFD Index Trackers, applicable during main trading hours and in normal market conditions, meaning that clients will experience a reduction in trading cost of up to 30% on the most popular CFD Index Trackers. This gives clients an improved trading experience and a high degree of certainty with regards to trading costs associated with entering and closing CFD Index Tracker positions. For the main US, European and Asia-Pacific Indices, the spreads are fixed at the minimum target spreads during the opening hours of the underlying cash market. “Fixed” spreads apply under normal market conditions and up to a certain trade size.
These new initiatives follow a series of other recent improvements to Saxo Bank’s CFD offering including active pricing on equity products and Direct Market Access on Single Stock CFDs.