Our credit line explained

 

REMARFX offers a credit line to SuperTrader investors. 

 

YOU DEPOSIT $2000

WE CREDIT UP TO $8000

YOU INVEST WITH $10,000

 

This is NOT a bonus. Bonuses were originally devised by online gambling websites as a way to lock-in customer deposits. They are now used by many disreputable brokers to similar ends.

 

Deposit Requirements

The minimum deposit for REMARFX SuperTrader investors is $2000 with a credit multiplier of 4. In this way, investors can meet the minimum capitalization requirement of $10,000 without having to deposit the full amount. This protects against the associated risks with undercapitalized accounts.

 

For optimal functioning, a SuperTrader portfolio must be adequately diversified by being invested in a number of strategies with sufficient capital allocated to each one and enough free equity remaining for further allocation. Deposits made in EUR and GBP will be converted to USD and should total to at least $10,000 after the use of a credit multiplier. Subsequent deposits have no minimum required amount.

In order to make the platform more accessible, we offer a credit line that allows you to multiply your investment by up to 4 times and add it to your initial deposit. So, in order to meet the $10,000 minimum deposit requirement, an investor can deposit as little as $2000 and obtain the remaining $8000 using our credit line.

 

Existing SuperTrader clients who wish to take advantage of our credit line are not required to meet the deposit requirement and are free to take advantage of the credit line or to continue copying strategies without it. Find out more by downloading our Credit Line Guide

Minimum account size

The minimum account size for REMARFX SuperTrader is $10,000, however, investors should be aware that the more capital you have available, the more diverse your FX portfolio will be.

 

One of the first laws of trading is to avoid trading with an underfunded account. Underfunded accounts are very vulnerable to volatility. An underfunded SuperTrader account hinders the performance of your strategies to be performed in-line with leaders’ positions. There are three main reasons for this:

 

An underfunded account does not allow funds to be allocated to a range of strategies. This causes the investor’s portfolio to be inadequately diversified.

 

An underfunded account forces investment to be overleveraged in relation to the followed leader, translating to increased risk for the investor.

 

These two issues result in the investor’s portfolio being vulnerable to drawdowns.

Credit line risks, margin and maintenance calls

While our credit line makes additional funds available to investors and offers the potential for increased returns, it also comes with its own risks. All losses incurred while investing in SuperTrader strategies are borne by your risk capital alone and not the funds REMARFX has credited to you. Using a credit line allows you to continue allocating funds to strategies even as your own equity diminishes. When using a credit line, you may receive a margin call if you have insufficient equity to absorb the losses resulting from a drawdown.

 

You will receive a margin call notification when your equity (excluding Credit amount) drops to 6% of the credit amount. When your equity (excluding Credit amount) drops to 3% of the credit amount, you will be stopped out. Any strategies you are following will be stopped and all trades will be closed automatically to protect your account from a negative balance.

 

As a SuperTrader investor, you have the added option of receiving a maintenance call via email or SMS. In this way, you can avoid the liquidation of your open positions by depositing more funds into your account, if you choose to do so.

Problem

The following is a perfect example of how an underfunded portfolio proportionally takes on more risk than that of the leader being followed:

 

An investor with $4000 in their SuperTrader account allocates the full amount to a single strategy. The leader of that strategy, whose own capital totals $40,000, opens a buy position of 0.04 lots (0.04 lots = $4000). The investor’s available capital is 1/10th that of the leader’s, so a proportionate position is taken on the investor’s behalf. This would have been 0.004 lots ($400), but seeing as the smallest available lot size is 0.01 ($1000), the investor’s position must be rounded-up to this amount. This makes the size of the investor’s position 1/4th of his or her total risk capital, while the leader’s is 1/10th. Furthermore, rounding the investor’s position up results in the investor’s position being overleveraged by 2.5 times (0.01/0.004 = 2.5).

 

You wish to invest $90,000. You invest $30,000 and FxPro’s credit line will make the remaining $60,000 available to you. 

 

  • In the case where your portfolio loses 10% and you stop the investment

  • The loss on the full $90,000USD is $9000USD, $60,000USD goes back to REMARFX

  • The $9000 loss will be deducted from your risk capital (30,000 -9,000 = $21,000)

  • In the case where your portfolio earns 10% profit and you stop the investment: $90,000 + $9000 profit. $60,000 goes back to FxPro. The $9,000 profit will be added to your risk capital, 30,000 + 9,000 = $39,000.

 

How we are able to offer a credit line

  • REMARFX complies with MiFID (EU Directive 2004/39/EC).

  • As a result, we keep our clients’ funds in segregated accounts and can only use this money to settle profit and loss between our clients and the banks with which we trade as counterparty.

  • In order to provide liquidity and margin to our clients, REMARFX uses its own funds. We cannot use our clients’ funds for liquidity or margin requirements.

  • We do not require any funds other than the investor’s risk capital, which will be used to cover any loses that may result during trading.

  • Offering a credit line does not have any additional cost for us due to keeping enough of our own funds with our Prime Broker in order to supply liquidity to SuperTrader. As a result, we do not charge you for this facility.

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