Mark K233 Bailey

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What are margin requirements and how do they differ by regulator?

Margin requirements define collateral needed to open leveraged positions. In the U.S. (CFTC/NFA), retail margin caps are 1:50 for majors, 1:20 for minors. In Europe (ESMA), caps are 1:30 and 1:20. Australia (ASIC) follows 1:30. By contrast, offshore brokers may offer 1:500 or more, but often with weak oversight. Institutions face stricter initial/variation margin under Basel III and EMIR, with collateral calls managed daily. Benefits: leverage control, client protection. Risks: too much margin restricts opportunity; too little invites ruin. Retail traders must recognize that margin is not “extra money” but a risk buffer. Differences across regulators explain why many retail accounts migrate offshore—though often at the cost of safety.