Ratings usually range from 1 to 6 and are used to determine an instrument's margin requirements and collateral value. With a higher rating, the margin requirements for margin trading increase, while the collateral value decreases. Instruments with higher ratings are typically linked to lower liquidity, smaller market capitalization, and higher volatility. However, other factors also influence the rating.
How does Saxo determine the different ratings for instruments?
Saxo determines the rating of an instrument by evaluating factors such as market capitalization, liquidity, volatility, country of incorporation, industry, and mergers & acquisitions activity of the underlying instrument.
Determining ratings is an ongoing process which is why the rating on an instrument might change over time.
Why are some instruments "reduce only"?
Some instruments are designated as "reduce only" which can be caused for various reasons. This designation means that you can only reduce your existing positions and not open new ones in the instrument.
It's important to note that this status does not necessarily correlate with the rating and may be associated with other factors such as low liquidity.
Why can I suddenly only reduce my position?
You might be unable to increase your previously held or current positions for several reasons, such as changes in your exposure, the liquidity of the instrument, or an increase in the rating when CFD short selling.
Where can I view the rating of an instrument?
You can view the rating of an instrument in multiple ways as shown below:
1. Chose an instrument and open a trade ticket by clicking Trade > Click the "i" in the top right corner next to the instrument name to view the Trading Conditions > Click the Instrument tab > Rating
2. In the Product overview, click "i" in the top right corner > Click the Instrument tab > Rating
What does a rating of 6 imply?
Instruments with a rating of 6 imply higher margin requirements and lower collateral terms than lower ratings. CFDs with a rating of 6 are disabled for short selling.
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