Explanation of risk status and margin mechanism of forex accounts

For forex accounts, there are initial margin and maintenance margin. They represent funds required to hold positions and place pending orders.

● Initial margin is a margin requirement that you must meet to open a position in a forex contract. You may not be able to do so unless your buying power can cover initial margin. When the equity in your account falls below the initial margin due to market fluctuations, you will not be able to open positions.

● When your equity falls below the maintenance margin due to market fluctuations, your account will be in Margin Call status and a margin call will be issued. You will be required to deposit funds or cancel pending orders or close positions to increase your equity above the maintenance margin; otherwise, margin call will continue, your positions may be liquidated and withdrawals restricted. Futu sets its maintenance margin requirement as 60% of the initial margin.