Risk rate
The share of a security's value a broker requires to be held as collateral behind a leveraged position.
How to read the number
The higher the rate, the smaller the position permitted on the same capital. Rates differ by instrument and follow how stable the broker judges each one to be.
When the metric lies
Rates are revised without notice. An increase cuts the permitted position immediately and can turn a comfortable account into one short of collateral overnight.
Also known as: haircut rate