Leverage & Margin Policy

1. Introduction

ZenGuard Markets Ltd provides leveraged trading in Contracts for Difference (CFDs) and other financial instruments. Leverage and margin are fundamental concepts that govern how much capital you need to open and maintain positions. This Leverage and Margin Policy explains how leverage and margin work on our platform, the requirements that apply to different asset classes, and the procedures we follow in the event of margin shortfalls.

It is essential that you understand the risks associated with leveraged trading before you begin. Leverage amplifies both potential profits and potential losses. A small adverse market movement can result in significant losses relative to your initial investment. This policy should be read in conjunction with our Risk Disclosure and Terms of Service.

2. What is Leverage

Leverage allows you to control a larger position in the market with a smaller amount of capital. For example, with 1:30 leverage, you can open a position worth 30 times your margin requirement. If you deposit 1,000 and use 1:30 leverage, you could potentially control a position worth 30,000.

Leverage is expressed as a ratio (e.g., 1:30, 1:100). The first number represents your margin (your capital), and the second number represents the total exposure you can control. Higher leverage means you need less capital to open a position, but it also means that small price movements have a proportionally larger impact on your account balance. ZenGuard Markets Ltd offers different leverage levels depending on the instrument, your client category, and applicable regulatory limits.

3. What is Margin

Margin is the amount of capital you must have in your account to open and maintain a leveraged position. It acts as collateral for the position and ensures that you can meet your obligations under the CFD contract. There are several types of margin: initial margin (or required margin) is the minimum amount needed to open a position; used margin is the amount currently allocated to your open positions; free margin is the amount available to open new positions or absorb losses; and maintenance margin is the minimum margin required to keep a position open.

When you open a position, the required margin is reserved from your account. As the market moves in your favor, your equity increases and your free margin grows. As the market moves against you, your equity decreases and your free margin shrinks. If your free margin falls below zero or fails to meet our margin requirements, we may issue a margin call or close your positions.

4. Leverage Tiers by Asset Class

ZenGuard Markets Ltd applies different maximum leverage levels depending on the asset class, in accordance with regulatory requirements and our risk management framework. The following tiers are indicative and may be subject to change; please refer to our trading platform for current leverage limits.

Forex: Major currency pairs (e.g., EUR/USD, GBP/USD, USD/JPY) typically have maximum leverage of 1:30 for retail clients under ESMA and FCA rules. Minor and exotic pairs may have lower leverage. Stocks: Equity CFDs are typically subject to maximum leverage of 1:5 for retail clients. Crypto: Cryptocurrency CFDs may have maximum leverage of 1:2 for retail clients, reflecting the higher volatility of these instruments. Indices: Index CFDs typically have maximum leverage of 1:20 for retail clients. Commodities: Commodity CFDs (gold, oil, etc.) typically have maximum leverage of 1:10 or 1:20 for retail clients.

Professional clients may be offered higher leverage limits at our discretion, subject to their acknowledgment of the associated risks. Leverage limits may also vary by jurisdiction to comply with local regulations.

5. Margin Requirements

Margin requirements are calculated based on the notional value of your position and the margin rate applicable to the instrument. The margin rate is the percentage of the position value that must be held as margin. For example, a 5% margin rate (1:20 leverage) means you need 5,000 in margin to open a 100,000 position.

Margin requirements can change without notice during periods of high volatility, low liquidity, or ahead of major economic events. We may increase margin requirements for specific instruments or across your account if we determine that market conditions warrant such action. You are responsible for monitoring your margin levels and ensuring you have sufficient funds to maintain your positions. Our trading platform displays your current margin level, used margin, and free margin in real time.

6. Margin Call Process

When your account equity falls below the margin required to maintain your open positions, your account enters a margin call state. At this point, your free margin is negative, meaning you have insufficient funds to cover potential further losses. ZenGuard Markets Ltd will notify you when your account reaches the margin call level, typically when your margin level falls below 100%.

Upon receiving a margin call, you should either deposit additional funds to restore your margin level or close some or all of your positions to reduce your margin requirement. We will attempt to contact you via email and through notifications on our platform. However, it is your responsibility to monitor your account. If you do not take action and your equity continues to fall, we may be required to close your positions automatically at the stop-out level to prevent your account from going into negative balance.

7. Stop-Out Level

The stop-out level is the margin level at which ZenGuard Markets Ltd will automatically close your open positions to prevent your account from incurring a negative balance. Our default stop-out level is typically 50% for retail clients, meaning that when your margin level falls to 50% or below, we will begin closing your positions, starting with the position that has the largest loss.

Positions are closed at the prevailing market price, which may result in slippage during volatile market conditions. The order in which positions are closed is determined by our risk management system. Once your margin level is restored above the stop-out level, no further positions will be closed automatically. You should be aware that in fast-moving markets, the stop-out may occur before you receive a margin call notification, and you may not be able to prevent it.

8. Negative Balance Protection

ZenGuard Markets Ltd provides negative balance protection to retail clients in the United Kingdom and European Economic Area. This means that if your account balance becomes negative as a result of market movements, we will not seek to recover the negative amount from you. We will bring your account balance back to zero at our expense.

Negative balance protection does not apply to professional clients or eligible counterparties, who may be liable for any negative balance arising from their trading. Negative balance protection also does not apply in certain circumstances, including where the negative balance arises from fraud, abuse, or manipulation by the client, or where required by applicable law. Clients in jurisdictions outside the UK and EEA should check whether negative balance protection applies to their account.

9. Dynamic Leverage

ZenGuard Markets Ltd may apply dynamic leverage to certain instruments, whereby the leverage available to you decreases as your position size increases. This is a risk management measure designed to limit exposure during periods of high volatility or when position sizes are large relative to typical market depth.

Under dynamic leverage, a client might have 1:30 leverage for positions up to a certain notional value, 1:20 for larger positions, and 1:10 for very large positions. The specific thresholds and leverage tiers are displayed on our trading platform and may be updated from time to time. Dynamic leverage ensures that larger positions are subject to higher margin requirements, reducing the risk of sudden, large losses.

10. Weekend and Holiday Margin

Margin requirements may be increased over weekends and during public holidays when markets are closed or liquidity is reduced. This is because price gaps can occur when markets reopen, and we need to ensure that clients have sufficient margin to absorb potential adverse movements.

We may apply a weekend margin multiplier (e.g., 1.5x or 2x) to certain instruments, particularly forex pairs, from Friday evening until Sunday evening or market open. Similarly, ahead of major holidays, we may increase margin requirements. You will be notified of any such changes through our platform and website. It is your responsibility to ensure you have sufficient margin to maintain your positions over weekends and holidays.

11. Regulatory Leverage Limits

ZenGuard Markets Ltd is subject to regulatory leverage limits imposed by the Financial Conduct Authority (FCA) and, where applicable, the European Securities and Markets Authority (ESMA). For retail clients, these limits restrict the maximum leverage that can be offered for different instrument categories.

We comply with all applicable regulatory requirements and may apply stricter limits than the regulatory minimum where we consider it appropriate for risk management purposes. Regulatory limits may change, and we will update our leverage offerings accordingly. Clients in certain jurisdictions may be subject to different leverage limits imposed by their local regulators.

12. Risk Warnings

Leveraged trading carries a high level of risk and may not be suitable for all investors. You may lose more than your initial investment. Past performance is not indicative of future results. The use of leverage amplifies both profits and losses, and a small adverse market movement can result in the loss of your entire margin or more.

You should only trade with funds that you can afford to lose. Before trading, you should ensure you fully understand the mechanics of leverage and margin, the implications of margin calls and stop-outs, and the risks specific to the instruments you intend to trade. If you are unsure, you should seek independent financial advice. ZenGuard Markets Ltd does not provide investment advice.

13. Contact

If you have any questions about this Leverage and Margin Policy or require clarification on how leverage and margin apply to your account, please contact us:

ZenGuard Markets Ltd Client Support Email: support@zenguardmarkets.com Address: 1 Canada Square, Canary Wharf, London E14 5AB, United Kingdom

Our support team can provide general information about margin requirements and leverage. For specific calculations related to your positions, please refer to our trading platform or use our margin calculator tool.