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			Important Notice : about Magin Call In case of Margin Call, your position will be closed for loss cut. (Check out below for the New margin system effective from May 2005) In Japanese commodity market, 50% is the key level. For example, when you buy one lot of Gold in Tokyo Commodity Exchange (TOCOM), Initial Customer Margin is 60,000 yen (as of Feb. 2005). If the market moves against your expectation and your loss becomes more than half of the deposit margin, then you will be on Margin Call. You have to deposit another 30,000 yen as Maintenance Margin. (Total margin becomes 90,000 yen.) Maintenance Margin should be deposited until noon of next business day of the Margin Call. If you have enough amount of excess fund in your account, Maintenance Margin will be automatically filled. But if not, we have to liquidate part or all of your positions as required by the exchange regulations. This loss cut shall be executed in the first afternoon session of the next business day of the Margin Call. However, it is possible that the market moves to limit high or limit low or the trade may be aborted by the exchange for some reason; therefore, said loss cut order cannot be executed, and the loss may become larger. In case you wish to avoid this liquidation, you have to send enough amount of fund to the account within that morning. However, for the international transfer, it is virtually impossible to be in time even by telegraphic transfer. You should always check your account status and current balance of profit & loss so that you can maintain your position in accord with your investment strategy. New margin system in effect from May 1st, 2005 Margin system of Japanese commodity futures changes with great complexity. Until the end of April 2005, "50% level" dominates most of the critical numbers of the system. Customer falls into margin call when his trading loss (loss of his open positions at the close) exceeds amount of 50% of customer margin. And the amount required to deposit is 50% of the customer margin. One of the important changes from May 1st, 2005 is the amount of maintenance margin. Customer who is on margin call will be required to deposit the exact amount of trading loss. Think about the case that a customer buys 1 lot of a commodity at the price of 1,500 yen (depositing 100,000 yen as initial customer margin). (1) The market sinks to 1,430 yen and his trading loss swells to 70,000 yen. Until May 1st, maintenance margin required is 50,000 yen (50% of customer margin). From May 1st, the customer is required to deposit 70,000 yen (equal to his trading loss). (2) The market recovers a bit to 1,460 yen. (Trading loss decreases to 40,000 yen) Until May 1st, entire maintenance margin (50,000 yen) is back. From May 1st, basically, maintenance margin is kept. If the customer wish, up to 30,000 yen (70,000 yen minus trading loss of 40,000 yen) can be back only at his request. So, once margin call is incurred, maintenance margin can not be released to zero unless his position turns profitable. (3) In case the market collapses to 1,390 yen after (1) Trading loss becomes 110,000 yen. Since he has already deposited 70,000 yen as maintenance margin and newly generated loss (40,000 yen) does not exceed 50% of initial customer margin (50,000 yen), there will not be any margin call. He may be on second margin call only when the market further drops below 1,380 yen in this case. When the market closes at 1,370 yen, for example, his trading loss and maintenance margin required are both 130,000 yen. He is on second margin call and should deposit 60,000 yen to meet up the required margin, adding up to his first maintenance margin. Be carefull, if the market goes straight down to 1,390 yen from 1,500 yen in a day. The customer will be on margin call (first time) and be required to deposit 110,000 yen as maintenance margin.
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