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X_TRADER®

Understanding Credit and Margin

You are viewing X_TRADER Version 7.17 and higher. For earlier versions, click here

Columns in the Position window help you better understand credit and margin.

Margin is the amount of money you need set aside for open positions and working orders. Margin is calculated at the Product level and appears as a column in the Position window.  One of two methods of margining exist in X_TRADER 7.8.

  • If you log into X_TRADER using TT User Setup 7.2.0 or higher, a new risk component is used and intra-product spreads can be margined in addition to charging margin for the outright positions.  
  • If you log into X_TRADER using Trader Login or a version of TT User Setup prior to 7.2.0, Guardian risk checking is used and margin is only charged for your overall worst case position at the product level. 

Credit is the amount of money you can lose per session.  If a Credit value is entered by your Risk Administrator, it displays for any row that is grouped by Member/Group/Trader or on the top row of the Position window which aggregates all fills and orders. 

Available Credit is the amount of money available for you to use once P/L and Margin are taken in account. Available Credit = Credit + Overall P/L –Total Margin Required

Example: Spread Margin=500, Future Margin=1000, Credit=6000, Overall P/L=-225

Filled Positions

Long

Short

MAR

1

0

JUN

0

2

SEP

3

0

DEC

0

4

Sum

4

6

Your position for this product is 2 (Short 6 - Long 4) and there are 4 spreads.

Using the new margining method:

  • Product Margin = 2 * 1000 + 4 * 500 = 4000
  • Available Credit = 6000 - 225 - 4000 = 1775

Using the old margining method:

  • Product Margin = 2 * 1000 = 2000
  • Available Credit = 6000 - 225 - 2000 = 3775  

For more information and examples on calculating Margin and Available Credit, reference the TT User Login and Risk Administration Guide.