What is margin utilisation?
Updated over a week ago

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.

Did this answer your question?