Margin utilization represents the proportion of margin collateral you have used for trading on margin. If the margin utilization exceeds 100%, it triggers a margin call, which poses the risk of active positions being either reduced or liquidated.
The formula for calculating margin utilization is:
Margin Utilization (%) = 100 * (Used Margin) (Cash Balances + Total Trades Value)
For example:
Account Value (NAV) = $132,164 (Total Cash Balances + Total Trades Value)
Used Margin (Sum of $ margin) = $133,654
Therefore:
MU% = 101% (133,654 / 132,164 * 100)
This indicates that the account is experiencing a margin call and requires positions to be reduced.
EXANTE applies two types of leverage rates for the instruments:
The standard leverage rate represents the percentage of the asset value held as a margin. For instance, a 30% Leverage Rate means that 30% of the asset's value is blocked as a Used margin in the account.
The Concentration Rate is a penalty for having too much of your funds concentrated in a single asset. A 50% Concentration Rate indicates that your position would be considered concentrated if your Net Asset Value (NAV) falls below 50% of the asset's value. In such cases, the percentage of funds used for margin will increase to the Concentration Rate value. More information on Concentration Rate can be obtained here.